REUTERS, New York

Oil prices steadied on Friday, but fell for the week on a stronger US dollar and fears that an economic slowdown would weaken crude demand.

Brent crude futures settled at $96.72 a barrel, gaining 13 cents. US West Texas Intermediate crude ended 27 cents higher at $90.77. Both benchmarks fell about 1.5 per cent on the week.

Oil briefly jumped in volatile trade on comments by Richmond Federal Reserve President Thomas Barkin who said the drive to raise rates also needs to be balanced with the impact rate hikes are having on the economy. But crude pared gains as investor concerns about upcoming rate hikes settled back in. Strength in the US dollar hit a five-week high, which also capped crude’s gains as it makes oil more expensive for buyers in other currencies.

“Although the oil complex has been able to shrug off a strong dollar on any given session, extended strong dollar trends will pose a major headwind against sustainable oil price gains,” Jim Ritterbusch, of oil trading advisory firm Ritterbusch and Associates, said in a note.

In a sign of easing oil supply tightness, the price gap between prompt and second-month Brent futures has narrowed by about $5 a barrel since the end of July to under $1. The spread for WTI has shrunk to a 39-cent premium from a nearly $2 premium in late July.