Oil Prices Slip Further on U.S. Budget Stand-Off
Oil prices retreated in Asian trade Friday as traders grow increasingly concerned at the lack of a breakthrough in the U.S. budget stand-off that has closed parts of the government down.
New York's main contract, West Texas Intermediate for delivery in November, eased 15 cents to $103.16 in mid-morning trade while Brent North Sea crude for November dipped 28 cents to $108.72.
"Oil prices continue to drift downwards as there hasn't been any concrete steps taken to resolve the U.S. government shutdown," Kelly Teoh, market strategist at IG Markets in Singapore, told Agence France Presse.
"Global economic fundamentals have already been weak, and this stand-off is putting more pressure on prices," she said.
President Barack Obama demanded Thursday and end to the three-day crisis he decried as a reckless "farce", piling pressure on Republicans to give up on their demands he delays implementation of his healthcare law.
However, the main concern about global investors is the possibility the row will drag on past a mid-October deadline when the government reaches its spending limit and is unable to pay its bills or service its debts.
If the borrowing limit is not raised the country will default, sending devastating shockwaves around the world economy.
Singapore-based Phillip Futures said in a note: "We expect market tension particularly in the form of weakening dollar and declining equities to continue and intensify respectively."
Analysts said losses were capped by the shutdown of oil and gas production in the Gulf of Mexico due to the Tropical Storm Karen.
The storm -- expected to be at or near hurricane strength on Friday -- is expected to approach land on Saturday.
Source: Agence France Presse
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