Oil prices dipped on Friday after two days of gain, as market participants weighed worries about global economic slowdown — that could dampen fuel demand — against expectations of tighter supplies toward year-end.

Brent crude futures fell 36 cents, or 0.4 per cent, to $96.23 a barrel by 0309 GMT after settling 3.1pc higher on Thursday. US West Texas Intermediate crude was at $90.29 a barrel, down 21 cents, or 0.2pc, following a 2.7pc increase in the previous session.

Still, the benchmark contracts were headed for weekly losses of about 1.5pc.

While bullish US weekly data bolstered optimism for improved fuel demand for the near-term, lingering recession fears and a possible increase in output by Opec+ will likely limit oil price's upside, said Satoru Yoshida, a commodity analyst with Rakuten Securities.

US crude inventories fell sharply as the nation exported a record five million barrels of oil a day in the most recent week, with oil companies finding heavy demand from European nations looking to replace crude from warring Russia.

Keeping crude supplies snug, US oil refineries plan to keep running near full throttle this quarter, according to executives and estimates, as refiners set aside worries about recession and sliding retail prices to deliver more fuel.

The rise in US fuel production could partly offset lower oil product exports from China this year as Beijing prioritises the local market to curb domestic fuel inflation.

On supplies, Haitham Al Ghais, new secretary general of the Organisation of the Petroleum Exporting Countries, told Reuters that policymakers, lawmakers and insufficient oil and gas sector investments are to blame for high energy prices, not his group.

The group together with allies such as Russia, known as Opec+, are due to meet on Sept 5 to adjust production. Opec is keen to ensure Russia remains part of the Opec+ oil production deal after 2022, Al Ghais said.

In a sign of improving supplies, the price gap between prompt and second-month Brent futures narrowed about $5 a barrel from the end of July. Record US crude exports, the resumption of Libya's production and sustained exports from Russia and Iran have eased global supply tightness ahead of peak refinery maintenance.

Russia forecasts rising output and exports until the end of 2025, an economy ministry document seen by Reuters showed, saying revenue from energy exports will rise 38pc this year, partly due to higher oil export volumes.

Iran, meanwhile, increased its oil exports in June and July and could raise them further this month by offering a deeper discount to Russian crude for its main buyer China, firms tracking the flows said.