Despite the day’s losses, New York-traded crude oil futures rose 2.3% on the week, as investors continued to monitor rising geopolitical tensions between Syria and Turkey.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December fell 0.45% Friday to settle at USD92.06 a barrel by close of trade.
In a monthly report released Friday, the International Energy Agency cut its world oil demand growth projection for 2012 by 100,000 barrels a day to 700,000 barrels a day.
The agency also lowered its 2013 global oil demand estimate by 100,000 barrels per day to 90.48 million barrels, citing lower consumption in Europe, the Americas and China.
The downbeat news came after the International Monetary Fund cut its 2012 and 2013 global growth forecasts earlier in the week to the weakest since the 2009 recession.
The IMF warned of even slower expansion unless officials in the U.S. and Europe address threats to their economies.
Market players also remained cautious amid ongoing uncertainty over Spain’s position on requesting external financial aid from its euro zone partners following a downgrade by ratings agency Standard & Poor’s.
S&P cut the country’s credit rating by two notches to BBB-minus with a negative outlook late Wednesday, just one notch above junk status, citing “mounting risks to Spain’s public finances.”
Market participants have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation.
But Spain has been reluctant to do so because it may come with conditions on its budget.
But prices remained supported as investors focused on escalating tensions between Syria and Turkey and the possibility that Iran could support Syria in such a dispute.
Tensions between Turkey and Syria have been growing since Syrian shells last week killed five people in a Turkish border village.
Growing tensions between Iran and Israel also remain in focus. There are fears that an escalation of hostilities between Israel and Iran could set off a conflict across the region and send oil prices skyrocketing.
Countries in the Middle East and North Africa were responsible for 36% of global oil production and held 52% of proved reserves in 2011.
In the week ahead, markets will continue to continue to focus on whether Spain will formally request a bailout and if international creditors will extend loans to Greece as the country struggles to meet deficit reduction targets.
Meanwhile, the U.S. is to release a flurry of data, including reports on retail sales, manufacturing activity in New York and Philadelphia, initial jobless claims and housing starts, among others.
Oil traders were also looking ahead to Chinese third quarter growth figures due out on October 18, to gauge whether the world’s second largest economy is heading towards a hard or a soft landing.
The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Market participants will also continue to monitor rising geopolitical tensions in the Middle East and Africa, amid growing fears over a disruption to supplies from the region.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for December delivery settled at USD113.56 a barrel by close of trade on Friday.
The London-traded Brent contract rose 1.6% over the week, with the spread between the Brent and the crude contracts standing at USD21.50 a barrel by close of trade Friday.
London-traded Brent prices have been well-supported in recent sessions, as a combination of lingering concerns over a disruption to supplies from the Middle East and worries over declining production in the North Sea-region have been boosting prices.
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