Crude oil futures - weekly outlook: January 27 - 31

             New York-traded crude oil futures fell from a three-week high on Friday, as growing concerns over the economic outlook in emerging markets and the impact on future oil demand prospects dampened the appeal of the commodity.

On the New York Mercantile Exchange, light sweet crude futures for delivery in March shed 0.7% on Friday to settle the week at USD96.64 a barrel by close of trade. 

On Thursday, Nymex oil prices hit USD97.84 a barrel, the strongest level since January 3, before trimming gains to end at USD97.32 a barrel, up 0.61%.

U.S. oil futures were likely to find support at USD95.12 a barrel, the low from January 22 and resistance at USD97.84 a barrel, the high from January 23. 

On the week, U.S. crude futures, also known as West Texas Intermediate or WTI, climbed 2.12%, the second consecutive weekly gain.

Weaker U.S. equities and ongoing turbulence in emerging markets prompted investors to move money out of industrial commodities and into safe haven assets. 

U.S. stocks suffered their worst weekly loss since 2011, with the Dow plunging 318 points on Friday. 

Meanwhile, a selloff in emerging markets accelerated, after the Turkish lira fell to the latest in a series of record lows against the dollar. South Africa’s rand, the Russian ruble and the Argentine peso all fell to multi-year lows against the greenback Friday.

Market sentiment was hit by concerns over a slowdown in China after data on Thursday showed that the preliminary reading of the HSBC manufacturing index fell to a six-month low in January.

The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Despite Friday’s losses, Nymex oil prices posted a weekly gain as the Keystone XL pipeline linking Cushing, Oklahoma, to the U.S. Gulf Coast began making deliveries this week. Flows will rise over the course of the year toward its 700,000-barrel capacity, which should ease bottlenecks that have depressed prices at times.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in oil futures in the week ending January 21.

Gross long oil positions rose by 10,614 contracts to 294,921, while gross short positions increased by 9,833 lots to 64,418. Net longs totaled 230,503 contracts, compared to 229,722 in the preceding week.

In the week ahead, Wednesday’s outcome of the Federal Reserve’s monthly meeting will be in focus amid expectations for a reduction to USD65 billion from the current USD75 billion in the bank’s stimulus program.

The policy-meeting will mark the last for outgoing Fed Chairman Ben Bernanke, as current Vice Chair Janet Yellen prepares to take over.

In addition, the initial estimate of U.S. fourth quarter gross domestic product is reported on Thursday.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for March delivery advanced 0.28% on Friday to settle the week at USD107.88 a barrel. 

The March Brent contract added 1.29% on the week. Meanwhile, the spread between the Brent and the crude contracts stood at USD11.24 a barrel by close of trade on Friday. - investing.com