Oil prices rose on Friday but were poised for a third straight week of losses after markets registered dramatic drops on fears of a weakening US economy and slowing Chinese demand.

Brent crude rose $1.22, or 1.7 per cent, to $73.72 a barrel by 0754 GMT. US West Texas Intermediate was up $1.11, or 1.6 pc, at $69.67 after four days of declines that sent the contract to lows last seen in late 2021.

The Brent benchmark was on track to finish the week with a decline of about 7pc while WTI was set for a 9pc loss.

“Rather than underlying fundamentals, the selling frenzy over the past week has been driven by worries about demand linked to recession risks and the strain in the US banking sector,” said PVM oil market analyst Stephen Brennock.

“The upshot is that there is a big disconnect between oil balances and oil prices. These dislocations tend to be temporary and normal order should soon be restored.”

Worries over a US regional banking crisis persisted after PacWest Bancorp said it planned to explore strategic options.

In China, factory activity contracted unexpectedly in April as orders fell and poor domestic demand dragged on the sprawling manufacturing sector.

Service activity in China grew through April, though the rate of this expansion has slowed, data showed on Friday.

However, expectations of potential supply cuts at the next meeting of the OPEC+ producer group in June have provided some price support, said Kelvin Wong, a senior market analyst at OANDA in Singapore.