Oil prices settled lower Friday, reversing early gains of more than $1 a barrel as banking sector fears caused both benchmarks to reach their biggest weekly declines in months.

Brent crude futures settled down by $1.73, or 2.3%, to $72.97 a barrel. U.S. West Texas Intermediate crude fell $1.61, or 2.4%, at $66.74.

At their session low, both benchmarks were down more than $3. Brent fell nearly by 12% in the week, its biggest weekly fall since December. WTI futures fell 13% since Friday's close, its biggest since last April.

"The underlying fundamentals aren't as terrible as what is being priced in here, but there is concern the oil is not as safe a place as cash or gold," said John Kilduff, Partner at Again Capital LLC in New York.

Oil prices tracked equity markets lower, dogged by the banking sector crisis and worries about possible recession.

All three indexes were sharply lower in afternoon trading, with financial stocks down the most among the major sectors of the S&P 500 following the collapse of Silicon Valley Bank (SVB) and Signature Bank and with trouble at Credit Suisse and First Republic Bank.

Prices had recovered some ground after support measures from the European Central Bank and U.S. lenders, but dropped again when SVB Financial Group said it had filed for reorganization.

Pressure stemmed from "the continued fragile state of the market", said Ole Hansen, head of commodity strategy at Saxo Bank.

Analysts still expect constrained global supply to support oil prices in the foreseeable future.

OPEC+ members attributed this week's price weakness to financial drivers rather than any supply and demand imbalance, adding that they expected the market to stabilise.

WTI's fall this week to less than $70 a barrel for the first time since December 2021 could spur the U.S. government to start refilling its Strategic Petroleum Reserve, boosting demand.

And analysts expect China's demand recovery to add price support, with U.S. crude exports to China in March heading towards their highest in nearly two and a half years.

Saudi Arabia and Russia in a meeting on Thursday affirmed their commitment to OPEC+'s decision last October to cut production targets by two million barrels per day until the end of 2023.

An OPEC+ monitoring panel is due to meet on Apr. 3.

(Reporting by Laura Sanicola in Washington and Rowena Edwards in London Additional reporting by Florence Tan and Trixie Yapin Singapore Editing by David Goodman and David Gregorio)