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Brent crude fell $2.50, or 3.3%, to $73.41 a barrel by 1031 GMT,
while West Texas Intermediate U.S. crude futures dived $2.47,
3.5%, to $67.49 a barrel.
Both benchmarks, which fell about 1% on Thursday, were on track
to end the week slightly higher, after posting their biggest
weekly declines in months last week due to banking sector
turmoil and worries about a possible recession.
Banking stocks slid in Europe with Deutsche Bank and UBS Group
hit hard by worries that the worst problems in the sector since
the 2008 financial crisis have not yet been contained.
A stronger dollar, which rose 0.6% against other currencies on
Friday, also fuelled the sell-off. A stronger greenback makes
crude more expensive to holders of other currencies.
"The lack of crude buying for the SPR represents a major blow to
the oil demand outlook," PVM Oil analyst Stephen Brennock said.
"If anything, it will heap even more pressure on China to do the
heavy lifting on the demand side over the coming months," he
added..
The White House said in October it would buy back oil for the
SPR when prices were at or below about $67-$72 per barrel.
Granholm told lawmakers that it would be difficult to take
advantage of low prices this year to add to stockpiles, which
are currently at their lowest level since 1983 following sales
directed by President Joe Biden last year.
Strong demand expectations from China capped decreases, with
Goldman Sachs saying commodities demand was surging in China,
the world's biggest oil importer, with oil demand topping 16
million bpd.
Meanwhile, Russian Deputy Prime Minister Alexander Novak said a
previously announced cut of 500,000 barrels per day (bpd) in
Russia's oil production would be from an output level of 10.2
million bpd in February, the RIA Novosti news agency reported.
That would mean Russia is aiming to produce 9.7 million bpd
between March and June, according to Novak, which would be a
much smaller output cut than Moscow previously indicated.
(Additional reporting by Yuka Obayashi in Tokyo and Trixie Yap
in Singapore; editing by Jason Neely)
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