Crude oil futures - Weekly review: September 16 - 20

                       New York-traded crude oil futures fell to a one-month low on Friday, amid lingering uncertainty over the future of the Federal Reserve's stimulus program and as fears a disruption to supplies from the Middle East continued to fade away.

On the New York Mercantile Exchange, light sweet crude futures for delivery in November declined 1.05% on Friday to settle the week at USD104.75 a barrel by close of trade. 

Prices fell by as much as 1.3% earlier in the day to hit a session low of USD104.51 a barrel, the weakest level since August 23. The November contract settled 1.3% lower at USD105.86 a barrel on Thursday.

Oil futures were likely to find support at USD103.56 a barrel, the low from August 22 and resistance at USD108.14 a barrel, the high from September 19.

On the week, Nymex oil futures lost 2.6%, the biggest weekly decline since the week ended July 26.

Oil prices rallied more than 2% on Wednesday after the Fed decided to leave its USD85 billion-a-month asset purchase program unchanged.

The decision surprised markets, which had been expecting the central bank to taper its monthly stimulus program by USD10 billion to USD15 billion.

In a press conference following the Fed statement, Chairman Ben Bernanke reiterated that the plan to taper asset purchases was never a "preset course," and added that the bank's decision was dependent on how the economic recovery continues to progress.

The central bank also repeated its ongoing goal to keep low interest rates in place until the unemployment rate falls to around 6.5%, as long as inflation doesn't accelerate beyond 2.5% a year.

However, traders reassessed their expectations regarding the duration of the central bank’s bond-buying program on Friday after St. Louis Fed President James Bullard said the decision not to taper in September was “close” and did not rule out a small reduction in the central bank's bond purchases in October. 

The Fed will hold its next monetary policy meeting on Oct. 29-30.

The Federal Reserve’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.

The dollar strengthened against the euro and the yen following Bullard’s comments, further weighing on oil prices.

A stronger dollar makes U.S. commodities more expensive for importers holding other currencies.

Meanwhile, receding fears over Middle East supply disruptions continued to weigh.

Oil prices surged to a 27-month high of USD112.22 a barrel on August 28 amid indications the U.S. was close to taking military action against Syria for its alleged use of chemical weapons against civilians. 

But prices have since lost nearly 6% after the U.S. and Russia reached a diplomatic solution on how to handle Syria’s chemical weapons last week.

While Syria is not a major oil producer, investors fear that the two-year-old civil war could spill over to affect oil supplies in nearby countries.

Reports that Libyan oil production is on the rise after protesters reopened access to facilities also added to the selling pressure, as did talk that oil output in Iraq is recovering.

Countries in the Middle East were responsible for nearly 35% of global oil production in 2012.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for November delivery inched up 0.4% on Friday to settle the week at USD109.22 a barrel.

Despite Friday’s modest gain, the London-traded Brent contract still lost 2.25% over the week, while the spread between the Brent and the crude contracts stood at USD4.47 a barrel by close of trade on Friday.

In the week ahead, uncertainty over the direction of the Fed’s monetary policy and the decision over Chairman Ben Bernanke’s eventual successor look likely to influence commodity prices. 

Oil traders will be closely watching a preliminary reading of China’s HSBC manufacturing index on Monday, to gauge the economic strength of the world’s second largest oil consumer.   - investing.com