Oil falls below $102 on US shutdown noticeOctober 1, 2013
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PAMELA SAMPSON, AP Business Writer
BANGKOK (AP) — The price of oil fell Tuesday after parts of the U.S. government were ordered to shut down because of a budget impasse in Washington.
Benchmark oil for November delivery dropped 35 cents to $101.99 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell 54 cents to close at $102.33 on Monday after trading as low as $101.05.
Just as the U.S. economy is struggling to expand, infighting among U.S. lawmakers is threatening to slow growth even further. On Monday, the last day of the current budget year, Congress failed to reach a critical agreement on short-term funding. That means some of the government must halt operations.
Separately, the government will run out of money to pay its bills by late October unless Congress raises the federal borrowing cap. Typically, lower spending is a negative for oil prices.
"When you're in a time of lower funding and money, you tend to cut things like travel," said Evan Lucas, market analyst at IG in Melbourne, Australia.
After climbing to over $110 in late August, the price of oil has fallen as diplomacy aimed at Syria and Iran eased concerns about Middle East supplies.
"Considering there was a big run-up in oil prices two weeks ago, it's just a bit of a correction," Lucas said.
Brent crude, the benchmark for international crudes used by many U.S. refineries, fell 64 cents to $107.73 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline fell 1 cent to $2.618 per gallon.
— Natural gas lost 2 cents to $3.54 per 1,000 cubic feet.
— Heating oil retreated 1.1 cents to $2.961 per gallon.