Oil prices rose on Friday as investors considered Russia’s threat to halt oil and gas exports to some buyers, but crude was set for a second straight weekly decline as central banks’ aggressive rate hikes and China’s Covid-19 curbs weighed on demand.

Brent crude futures rose 27 cents, or 0.3 per cent, to $89.42 a barrel by 0330 GMT. US West Texas Intermediate (WTI) crude futures climbed 15 cents, or 0.2pc, to $83.69.

“I think the selloff in oil prices may come to a pause for now due to a recovery in risk sentiment across the board,” said CMC Markets analyst Tina Teng, adding that a weaker dollar and falls in bond yields have offered support for a rebound in risk assets.

“Fundamentally, a sharp decline in the US SPR suggests that undersupply is still a predominant issue in the physical oil markets, though recession fears may continue to weigh,” Teng added.

Both oil benchmarks were headed for a weekly drop of 4pc, with the market sliding at one point this week to its lowest level since January.

The decline is capped by underlying supply tightness amid Russia’s threat to cut oil flows to any country that backs a price cap on its crude, as well as a small output cut by the Organisation of the Petroleum Exporting Countries (Opec) and allies, and a weaker outlook for US oil production growth.

The US Energy Information Administration on Thursday said it expected US crude output to rise by 540,000 barrels per day to 11.79 million bpd in 2022, down from an earlier forecast for a 610,000 bpd increase.

Analysts said in light of the supply outlook, the sell-off, which sent the 50-day moving average below the 200-day moving average mid-week in what’s referred to as a ‘death cross’, may have been overdone, as demand in China, the world’s biggest oil importer, could recover swiftly.

“China demand is more difficult to predict, but a post-Covid reopening has previously seen a snap back rather than a gradual rise in demand. In that context the fundamentals appear skewed against the latest technical signals,” National Australia Bank analysts said in a note.

For now, curbs are tightening in China. The city of Chengdu on Thursday extended a lockdown for most of its more than 21m residents, while millions more in other parts of China were urged not to travel during upcoming holidays.