Light, sweet crude-oil futures tumbled 1.8% to $95.70 a barrel Friday amid concerns over slower-than expected U.S. economic growth.

Prices came under further pressure as a deal to resolve the crisis over the U.S. debt ceiling remained in limbo ahead of the fast-approaching Aug. 2 deadline.

Traders voiced fears that the already-weak outlook for U.S. oil demand could be hit further if Congress and the White House draw up an austerity budget that severely curbs government spending. Some market participants see stronger odds of near-term U.S. crude-oil futures falling into the $80s than again climbing above $100 a barrel.

Light, sweet crude-oil futures for September delivery on the New York Mercantile Exchange settled $1.74 lower at $95.70 a barrel, the weakest price since July 18. The contract briefly dropped to a session low of $94.95 a barrel. ICE Brent crude for September settled down 62 cents at $116.74 a barrel.

U.S. gross domestic product grew at a rate of 1.3% in the April-to-June period, the Commerce Department said, while economists surveyed by Dow Jones Newswires had expected growth of 1.8%. A steep downward revision in first-quarter data to 0.4% from the earlier 1.9% estimate added a further wallop to hopes of strong near-term growth.

The "staggering" weakness in U.S. economic growth data means "we are probably going to see crude in the $80s before we get to $100 again," said Zachary Oxman, managing director of TrendMax Futures. Crude oil last settled below $90 on Feb. 18 and last settled above $100 on June 9.

"We could see sub-2% growth this year and that bodes poorly for crude," he said.

In its current Short-Term Energy Outlook, issued early this month, the U.S. Energy Information Administration projected fractional growth in U.S. oil demand of just 0.2%, even with 2011 GDP growth of 2.5%.

Tim Evans, analyst at Citi Futures Perspective, noted that second-quarter U.S. economic growth was stronger than that of the first quarter, though he added "that's using a pretty strong microscope in search of a green shoot." He expressed concern that potential government austerity measures attached to a still-elusive deal on the debt ceiling "will prove to an ongoing drag on economic performance."

Gene McGillian, analyst and broker at Tradition Energy, said $95 a barrel will be a critical level for oil prices to hold in the near term. But he said severe budget cuts that slow the economy could knock crude oil back down to $85 a barrel soon. "If the government is going to cut back spending, what is going to take its place?" he asked, echoing widespread market concerns.

He noted that U.S. oil inventories are "more than ample" and a further drop in demand would add to pressure on prices.

EIA data for the week ended July 22 show combined demand for gasoline and distillate fuel (diesel/heating oil) in the past four weeks is lagging the year-earlier level by 3.4%. Those products account for two-thirds of U.S. oil demand.

Tropical Storm Don, which is expected to make a rainy landfall in the Texas refining region late Friday or early Saturday, appeared less of a threat than previously thought. On its current forecast path, the storm should pass well to the south of the cluster of oil refineries in the Houston area, but could still affect refineries around Corpus Christi with a combined capacity of 827,000 barrels a day. Companies were returning workers to offshore rigs that had been evacuated in recent days as a precaution and were beginning to restart some shut-in oil and natural gas output.

August-delivery reformulated gasoline expired down 0.47 cent at $3.1129 a gallon, while August heating oil went off the board at $3.0962 a gallon, down 0.9 cent.