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Crude oil futures - weekly outlook: July 27 - 31

© Reuters. Oil futures suffer heavy losses as U.S. drilling increases - U.S. oil futures fell to the lowest level in almost four months on Friday, after data showed that rigs drilling for oil in the U.S. rose last week, underlining concerns over robust domestic production.

On the New York Mercantile Exchange, crude oil for delivery in September hit an intraday low of $47.72 a barrel, a level not seen since April 1, before ending at $48.14, down 31 cents, or 0.64%.

On the week, New York-traded oil futures tumbled $2.97, or 5.99%, the sixth consecutive weekly loss, as worries over high domestic U.S. oil production weighed.

Nymex oil prices fell to the lowest levels of the session after industry research group Baker Hughes (NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. increased by 21 last week to 659, the most since May.

Elsewhere, on the ICE Futures Exchange in London, Brent for September delivery declined 65 cents, or 1.18%, to close at $54.62 a barrel after hitting a session low of $54.30, the weakest level since April 2.

For the week, London-traded Brent futures lost $2.50, or 4.34%, the fourth straight weekly decline, amid concerns a resumption of Iranian oil exports will add to a global glut.

Iran and six world powers reached a long-awaited nuclear deal earlier in the month that would end sanctions on Tehran in exchange for curbs on the country's disputed nuclear program. Iran reportedly hoards 30 million barrels of oil in its reserves ready for export.

Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $6.48 a barrel by close of trade on Friday, compared to $5.89 in the preceding week.

Concerns over the health of China's economy also weighed. The preliminary reading of the Caixin/Markit manufacturing purchasing managers’ index fell to a 15-month low of 48.2 this month from a final reading of 49.4 in June.

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

In the week ahead, market players will focus on the outcome of the Federal Reserve's highly-anticipated policy meeting on Wednesday as well as the release of preliminary second quarter growth data on Thursday.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, settled at 97.34 late Friday, paring the week’s losses to 0.65%.

The dollar has been boosted by expectations that the U.S. central bank could raise rates as soon as September if the economy continues to improve as expected.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets.

Monday, July 27

In the euro zone, the Ifo Institute is to report on German business climate.

The U.S. is to release data on durable goods orders.

Tuesday, July 28

The U.K. is to release preliminary data on second quarter economic growth.

The U.S. is to release a report on consumer confidence, while the American Petroleum Institute, an industry group, is to publish its weekly report on oil supplies.

Wednesday, July 29

The U.S. is to report on pending home sales and on crude oil inventories.

Later in the day, the Federal Reserve is to announce its latest monetary policy decision and publish its rate statement.

Thursday, July 30

In the euro zone, Germany and Spain are to release preliminary data on consumer inflation. Spain is also to release preliminary data on second quarter growth and Germany is to release data on the change in the number of people employed.

The U.S. is to produce preliminary data on second quarter growth and the weekly report on initial jobless claims.

Friday, July 31

The U.S. is to round up the week with revised data on consumer sentiment and a report on business activity in the Chicago region.