Oil prices end week downbeat

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IOL image oil rig generic FREE IMAGES An oil rig is shown in this file photo.

Oil prices dropped Friday at the end of a volatile week for crude markets amid clouded outlooks for economic stimulus as well as energy demand and against a backdrop of Middle East tensions.

Brent North Sea crude for delivery in October dipped 29 cents to $114.72 a barrel in late morning London deals after topping $116 on Thursday.

New York's main contract, light sweet crude for October shed 32 cents to $95.95 a barrel.

New York crude had on Thursday surged to $98.29 a barrel - the highest level for 3.5 months - as hopes of Chinese stimulus soared after manufacturing activity in the largest energy consumer fell to a nine-month low in August.

But prices began falling late in New York on Thursday as “revived hopes for more stimulus from the US... faded and doubts about Europe's ability to address its debt crisis crept back in focus,” Phillip Futures said in a report.

Hopes for a Fed-led stimulus, buoyed by minutes of the central bank's last meeting published Wednesday and showing “many members” supporting a move soon, faded after comments by a senior Fed official that the situation had changed.

Crude futures won support this week from official US data showing a slight tightening of oil supplies in the world's biggest economy.

This was counter-balanced by figures showing manufacturing activity in China - the world's largest energy consumer - had fallen to a nine-month low in August.

Oil prices were also weighed down by renewed concerns over the eurozone owing to German opposition to a Greek call for more time to enact Athens' spending cuts and reforms.

Losses were capped meanwhile by worries of possible tight supplies caused by tensions over Iran.

Israeli sabre-rattling about an imminent unilateral strike being prepared by the country against nuclear sites in major oil producer Iran has put markets on edge. - Sapa-AFP

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