On concerns of demand destruction, oil prices plummet, with benchmarks down 4% for the week

Oil prices dropped in early trade on Friday, following a slight recovery in the previous session, leaving them on track to fall for a second consecutive week on concerns that aggressive rate hikes by central banks and COVID-19 limitations by China may have an impact on demand.

Brent crude futures slipped 12 cents, or 0.1%, to $89.03 per barrel at 00:51 GMT on Friday, after rising 1.3% on Thursday.

Futures for U.S. West Texas Intermediate (WTI) crude fell 19 cents, or 0.2%, to $83.35 a barrel after a 2% increase in the previous session.

The market reached its lowest position since January at one point during the week, with both indexes down nearly 4%.

The decline has occurred despite a modest output cut by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, Russia's threat to cut oil flows to any country that supports a price cap on its crude, and a weaker outlook for the growth of U.S. oil production.

The U.S. Energy Information Administration forecast on Thursday that U.S. crude output will increase by 540,000 barrels per day to 11.79 million barrels per day in 2022, a reduction from a previous estimate of 610,000 bpd.

Amid the week, the 50-day moving average went below the 200-day moving average in what is known as a 'death cross,' leading analysts to assume that the sell-off may have been overblown, as demand in China, the world's largest oil importer, may recover swiftly.

"China's demand is harder to predict, but historically, a post-COVID reopening has been accompanied by a recovery rather than a gradual increase. The fundamentals appear to be at odds with the most recent technical indications in this context "National Australia Bank (OTC:NABZY) stock is cheap, according to a letter from analysts.

China is expanding its limitations today. On Thursday, the majority of Chengdu's more than 21 million residents were cautioned not to travel over upcoming holidays, while millions more were given the same advice in other regions of China.