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Oil prices plunged in early trade on Friday amid uncertainty on the demand outlook based on contrasting perspectives from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA). However, the benchmark contracts were headed for weekly gains as recession fears eased, according to news agency Reuters.

As per data reported by Reuters, the Brent crude futures fell by 34 cents, or 0.3%, to $99.26 a barrel at 0112 GMT, while U.S. West Texas Intermediate (WTI) crude futures dipped by 34 cents, or 0.3%, to $94.00 a barrel.

Earlier, the Brent crude futures was witnessing an upward journey to climb more than 4% for the week, recouping part of last week's 14% tumble, its biggest weekly decline since April 2020 amid fears that rising inflation and interest rate hikes will hit economic growth and fuel demand.

On the other hand, WTI was heading for a weekly gain of more than 5%, recouping about half of the previous week's loss.

Justin Smirk, a senior economist at Westpac said that there is a great deal of uncertainty about demand in the short run, until that settles, the market will be in the same position for a while.

The OPEC on Thursday cut its prediction for growth in world oil demand by 260,000 barrels per day (bpd) in 2022, and now expects demand to rise by 3.1 million bpd this year. It is contradictory from the viewpoint of IEA. The latter raised its forecast for demand growth to 2.1 million bpd due to gas-to-oil switching in power generation as a result of soaring gas prices.

At the same time, the IEA raised its outlook for Russian oil supply by 500,000 bpd for the second half of 2022, as the country's output had proven more resilient than expected despite sanctions over the Ukraine conflict. However, the IEA said OPEC would struggle to boost production, according to Reuters.

Vivek Dhar, Commonwealth Bank analyst said the net picture that the IEA painted was a mix and Russian supply has been more resilient than thought.

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