Oil prices rose more than $3 a barrel on Friday, supported by tighter supplies, but recorded a second weekly drop on concerns that rising interest rates could plunge the world economy into recession.

Brent crude was up $3.07, or 2.8%, to settle at $113.12 a barrel as of 16:10 GMT on Friday. West Texas Intermediate (WTI) crude was up $3.35, or 3.2%, to settle at $107.62.

Sentiment is shifting slightly over the US Federal Reserve’s hawkish stance undermining the oil rally and strong economic data.

Powell said the Fed’s fight against inflation was ‘unconditional’, raising fears of further rate hikes. US consumer confidence at record low, inflation outlook improving. A poll on Friday showed US consumer sentiment hit a record low in June, even as the inflation outlook improved slightly.

The Russian invasion of Ukraine exacerbated the supply tightness this year as demand recovered from the COVID pandemic, with oil nearing an all-time high of $147 reached in 2008.

Crude oil has benefited from the unrest in OPEC member Libya and the near-complete shutdown of production. On Thursday, Libya’s oil minister said the head of the National Oil Company was withholding production data from him and was skeptical of the figures released last week.

Fear of a recession prevails, but the consensus remains that the oil market will see high demand and tight supply during the summer, thereby limiting the downside.

The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, will meet on June 30 and are expected to stick to a plan that will only slightly increase increases in oil production in July and August.

They added oil and gas rigs for the second week in a row this week, as higher crude oil prices and government incentives spur drillers to return to wells, according to energy services firm Baker Hughes.

The latest weekly US oil inventory figures at top consumer, which will give us a glimpse of supply shortages, have been postponed to next week due to technical issues.