Oil prices eased early on Friday as hot U.S. inflation fanned worries about aggressive interest rate hikes and as investors await the outcome of U.S.-Iran talks that could lead to increased global crude supply.

Brent crude futures fell 40 cents, or 0.4 percent, to $91.01 a barrel at 0140 GMT, while U.S. West Texas Intermediate crude declined 25 cents, or 0.3 percent, to $89.63 a barrel.

The benchmark oil prices are also in line for their first weekly decline after seven consecutive weekly gains, though both contracts had earlier climbed to a seven-year high.

"The crude price rally has finally run out of steam as optimism grows that Iran nuclear deal talks are headed in the right direction and as the dollar rallies as money markets start to price in a supersized Fed hike," said Edward Moya, senior market analyst at brokerage OANDA.

"The oil market is still very tight, but exhaustion in the crude price rally has settled in. If the dollar continues to rally, oil prices could continue to decline further."

St. Louis Federal Reserve Bank President James Bullard had said he wanted a full percentage point of interest rate hikes by July 1, following the release of U.S. inflation data that saw its biggest annual increase in 40 years.

Investors have also been eyeing the indirect talks between the U.S. and Iran to revive a nuclear deal, which resumed this week after a 10-day break. A deal could see the lifting of sanctions on Iranian oil and ease global supply tightness.

White House spokeswoman Jen Psaki said the talks have "reached an urgent point," and that "a deal that addresses the core concerns of all sides is in sight."

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) said that the world's oil demand might rise even more steeply this year. The group forecast a gain of 4.15 million barrels per day (bpd) this year, as the global economy posts a strong recovery from the pandemic.