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SINAGPORE  -Oil prices edged lower on Friday as demand concerns emerged following interest rate hikes in the week, although new sanctions on Iran capped the downside.

Brent crude futures fell 47 cents, or 0.4%, to $119.34 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell to $117.02 a barrel, down 57 cents, or 0.5%.

If losses hold through the day, Brent crude futures would post their first weekly dip in five weeks, while U.S. crude futures would see their first dip in eight weeks.

"The central banks' rate hikes are pressuring the oil prices, despite ongoing tight supplies," said Tina Teng, an analyst at CMC Markets.

Central banks across Europe raised interest rates on Thursday, some by amounts that shocked markets, and hinted at even higher borrowing costs to come to tame soaring inflation that is eroding savings and squeezing corporate profits.

Argentina's central bank raised its benchmark interest rate by the most in three years on Thursday, as the South American country fights inflation running at over 60%.

Those moves came on the heels of a 75 basis point rate hike this week by the U.S. Federal Reserve, the highest since 1994.

However, investors remained focused on tight supplies after the United States announced new sanctions on Iran.

"The market has been watching negotiations between the West and Iran in anticipation of revival of the nuclear deal in recent months. This brought back into focus the ongoing supply side issues in the market," ANZ Research analysts said in a note.

The United States on Thursday imposed sanctions on Chinese and Emirati companies and a network of Iranian firms that help export Iran's petrochemicals, a step that may aim to raise pressure on Tehran to revive the 2015 Iran nuclear deal.