Oil headed for a third straight weekly drop on growing concerns over global demand and regional conflict. Global benchmark Brent crude climbed above $80 a barrel on Friday, but is down around 5 per cent this week.
Brent has plummeted around 13 per cent over the past three weeks on bearish demand signals from China, the US and Europe, while flows from the Middle East remained unaffected.
It's a sharp reversal from late September, when Brent flirted with $100 a barrel and the Organization of Petroleum Exporting Countries (OPEC) projected an unprecedented decline in inventories amid record fuel demand and the Saudi cuts.
"The recent plunge is unwarranted and "prices are likely to find support on reduced supply and potential bottlenecks in the Persian Gulf," Priyanka Sachdeva, a market analyst at Phillip Nova Pte said.
Diesel - a key fuel powering the economy - is becoming the latest drag on oil, with US futures slumping about 8 per cent this week. That echoes softness in Europe, where declines in industrial and economic activity in Germany, France and Spain have driven a sharper retreat of fuel consumption.