Crude oil futures - Weekly review: September 23 - 27

                New York-traded crude oil futures ended Friday’s session close to an 11-week low, as growing worries over a looming U.S. government shutdown and receding fears over a disruption to supplies from the Middle East weighed. 

On the New York Mercantile Exchange, light sweet crude futures for delivery in November declined 0.15% on Friday to settle the week at USD102.87 a barrel by close of trade. 

Prices fell by as much as 0.65% earlier in the day to hit a session low of USD102.37 a barrel, close to an 11-week low of USD102.20 a barrel hit earlier in the week.

The November contract settled 0.35% higher at USD103.03 a barrel on Thursday.

Oil futures were likely to find support at USD102.13 a barrel, the low from July 8 and resistance at USD105.09 a barrel, the high from September 23.

On the week, Nymex oil futures lost 1.8%, the third consecutive weekly decline.

Concern that U.S. lawmakers will fail to arrange a budget deal preventing a government shutdown next week dampened the appeal of growth-linked assets.

Congress must pass a short-term budget by midnight on Monday in order to avoid a government shutdown. 

Republican opposition to the funding of the Affordable Care Act has created a standoff with the White House and the Democratic-controlled Senate, which have both said they will not support any budget bill that defunds or amends Obamacare.

Later this month, Congress will have to extend the U.S. debt ceiling which the U.S. Treasury Department has estimated will be reached by October 17.

Meanwhile, concerns over a disruption to supplies from the Middle East continued to fade away after the U.S. and Russia agreed on a draft U.N. Security Council resolution aimed at eliminating chemical weapons in Syria.

Futures 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 5% after the U.S. and Russia reached a diplomatic solution on how to handle Syria’s chemical weapons on September 14.

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.

Thawing tensions between the U.S. and Iran also added to the selling pressure.

The two countries began talks on Thursday to resolve their ongoing standoff over Tehran's nuclear program.

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 shed 0.55% on Friday to settle the week at USD108.63 a barrel.

On the week, the London-traded Brent contract lost 0.55%, while the spread between the Brent and the crude contracts stood at USD5.76 a barrel by close of trade on Friday.

In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report, for indications on whether the economic recovery is sufficiently strong for the Federal Reserve to start rolling back its USD85-billion-a-month bond-buying program. 

The Fed’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.

Markets will also be watching developments in U.S. budget negotiations, as well as key manufacturing data out of China to gauge the economic strength of the world’s second largest oil consumer. - investing.com