Oil prices fell 2 per cent on Friday after Saudi Arabia eased investor concerns about a reported pipeline explosion that had pushed Brent to the highest level since 2008.
Both Brent and US crude retreated and ended with weekly losses after Brent futures jumped above $128 a barrel to levels last seen in July 2008 in post-settlement trade on Thursday, reacting to an Iranian media report of a pipeline fire in Saudi Arabia.
The surge in prices Thursday was short-lived and Saudi Arabia said on Friday that there had been no attack in the kingdom.
Brent April crude fell $2.55 to settle at $123.65 a barrel, having traded as low as $123.12, testing below its 10-day moving average of $123.22.
Brent fell 2 per cent for the week after five straight weekly gains.
US April crude fell $2.14 to settle at $106.70 a barrel, dropping as low as $105.80 and pushing below the 10-day moving average of $107.04 after reaching $110.55 during the previous day's surge.