On the New York Mercantile Exchange, light sweet crude futures for delivery in September dropped 0.82% Friday to settle the week at USD104.63 a barrel by close of trade.
On the week, Nymex oil futures fell 3.24%.
The release of mixed U.S. data on initial jobless claims and durable goods orders on Thursday fuelled fresh uncertainty over whether the Fed will start to scale back its bond buying program later this year.
The Labor Department said the number of individuals filing for initial jobless benefits last week increased by 7,000 to a seasonally adjusted 343,000, compared to expectations for an increase of 6,000 to 340,000.
Separately, the Commerce Department said orders for long lasting manufactured goods rose by a seasonally adjusted 4.2% in June, compared to expectations for an increase of 1.3%.
Durable goods for May were revised to a 5.2% gain from a previously reported 3.7% increase.
Core durable goods orders, which exclude volatile transportation items, were flat in June, compared to expectations for a 0.5% increase.
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 were also jittery after data earlier in the week showed that the preliminary reading of China’s HSBC manufacturing purchasing managers' index fell to an 11-month low of 47.7 in July, from a final reading of 48.2 last month. Analysts had expected the index to rise to 48.6.
China is the world’s second-largest oil consumer behind the U.S.
Crude Oil prices found some support however, after the American Petroleum Institute on Tuesday said U.S. oil inventories fell by 1.4 million barrels, well below the 2.6 million barrel decline forecast by analysts.
Recent oil inventory reports have shown that demand has been on the rise in the U.S. in the past few months.
In the week ahead, the U.S. is to publish data on gross domestic product and manufacturing activity to further gauge the strength of the U.S. economy. In addition, traders will be eyeing the Fed's monthly policy statement for indications on the future of the central bank's bond-buying program.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for September delivery slipped 0.01% on Friday to settle the week at USD107.11 a barrel.
The London-traded Brent contract lost 1.22% over the week, while the spread between the Brent and the crude contracts stood at USD2.48 a barrel by close of trade on Friday. - investing.com