BUSINESS

Oil near US$102 a barrel after US budget stalemate forces partial govt shutdown

10/01/2013 06:34 EDT | Updated 12/01/2013 05:12 EST
NEW YORK, N.Y. - The price of oil slipped to near US$102 a barrel Tuesday after parts of the U.S. government were ordered to shut down because of a budget impasse in Washington.

Benchmark West Texas Intermediate crude for November delivery fell 29 cents to close at US$102.04 a barrel in New York. Brent crude, a benchmark used to price imported crude used by many U.S. refineries, fell 43 cents to close at US$107.94 in London.

Relatively weak oil demand in the U.S. could weaken further if the shutdown curbs economic growth and continues to stop 800,000 federal workers from driving to work, according to Phil Flynn, a senior market analyst at the Price Futures Group.

"A prolonged stalemate could slow the economy and U.S. oil demand," Flynn wrote in a report Tuesday.

Investors will begin monitoring fresh information on U.S. stockpiles of crude and fuels Wednesday when the Energy Department's Energy Information Administration issues its weekly report. The EIA says it will continue to operate despite the shutdown for several more days.

Data for the week ended Sept. 27 is expected to show a build of 2.4 million barrels in crude oil stocks and a draw of 1.4 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

In other energy futures trading on the New York Mercantile Exchange, wholesale gasoline fell two cents to close at US$2.61 a U.S. gallon (3.79 litres), heating oil fell one cent to close at US$2.96 a gallon and natural gas rose five cents to close at US$3.61 per 1,000 cubic feet.

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