Brent, the global benchmark for oil, settled down 1 percent and less than $2 from a new 6-1/2-year low.

U.S. crude fell 2 percent, barely holding above $40 a barrel.

Both benchmarks lost 8 percent on the week, the most since mid-March.

Oil prices have fallen in seven of the last eight sessions, with losses accelerating after U.S. government data on Thursday affirmed a seventh weekly rise in U.S. crude inventories that took stockpiles near April's record highs.

Adding more pressure to prices, data on Friday showed the first rise in the U.S. oil rig count in 11 weeks.

The International Energy Agency (IEA) said there was a record 3 billion barrels of crude and oil products in tanks worldwide.

"The evolving bearish global balances that we alluded to all year are acquiring increased transparency," said Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates.