On the New York Mercantile Exchange, light sweet crude futures for delivery in March settled at USD99.71 a barrel by close of trade on Friday, adding 2.1% over the week, the first weekly gain in three weeks.
Crude prices dipped below USD100-a-barrel on Friday after official data showed that the U.S. economy grew at a slower pace than expected in the final three months of 2011.
The Commerce Department said U.S. gross domestic product expanded by 2.8% in the fourth quarter, disappointing expectations for an increase of 3%. While the rate of growth was the fastest in one-and-a-half years, the bulk of the increase came from a buildup in inventories.
The downbeat GDP data came after the Federal Reserve on Wednesday revised down its forecast for U.S. economic growth this year to a range of between 2.2% and 2.7%, from a range of 2.5% to 2.9% in November.
The U.S. is the world’s biggest oil-consuming country, accounting for nearly 22% of global oil demand.
Oil’s losses were limited by a broadly weaker U.S. dollar, which tend to boost dollar-denominated oil futures contracts. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, tumbled 1.98% on the week to settle at 78.94 by close of trade Friday, the lowest since December 9.
Meanwhile, oil traders continued to monitor tensions between Iran and the West. According to Iranian media, the country’s parliament will consider a plan to pre-empt a European embargo on its oil by halting its exports to the region as early as next week.
The European Union announced on January 23 that it would ban oil imports from Iran starting July 1 to pressure the Persian Gulf nation over its nuclear program.
Iran is the world's fourth largest oil producer, pumping nearly 5% of the world's oil in 2010. The threat of a major supply disruption from the country has helped support oil prices in recent weeks.
Meanwhile, in the euro zone, Greek Finance Minister Evangelos Venizelos said Friday that Athens was one step away from concluding a deal on the EUR100 billion debt write-down scheme.
An agreement is necessary for Greece to secure the next tranche of bailout funds in order to prevent a sovereign debt default. Greece does not have enough money to cover a EUR14.5 billion bond repayment due March 20.
Also Friday, ratings firm Fitch downgraded Italy, Spain, Belgium, Cyprus and Slovenia's sovereign debt ratings, saying they lack financing flexibility in the face of the regional debt crisis.
However, Fitch reaffirmed its rating on Ireland and left France and Germany, the euro zone's biggest members, untouched.
Euro zone developments have dominated trading in the oil market for the last several months, amid worries that the sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.
Crude prices spiked to a one-week high of USD101.37 a barrel on Thursday after Federal Reserve Chairman Ben Bernanke pushed back the timing of a possible interest rate increase until late 2014 and indicated that the bank may embark on a third round of quantitative easing.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery settled at USD111.62 a barrel by close of trade on Friday. The Brent contract rose 1.8% over the week, with the spread between the Brent and the crude contracts standing at USD11.91 a barrel.
In the coming week, investors will be closely watching development in Greece as well as the outcome of Monday’s European Union summit.
In addition, the U.S. is to publish data on service and manufacturing sector growth while Friday’s data on non-farm payrolls will be an important gauge of the recovery in the labor market. (source http://www.forexpros.com ) For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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