Oil prices fall on ‘fiscal cliff’ concerns
Crude oil prices dropped Thursday in thin trading and on uncertainty about whether a deal to avert the US “fiscal cliff” of tax hikes and spending cuts could be reached by a year-end deadline, analysts said.
New York’s main contract, light sweet crude for delivery in February, shed 12 cents to $90.86 a barrel.
Brent North Sea crude for February lost 58 cents to $110.49 a barrel in London midday deals.
Crude was “consolidating” after the previous day’s large gains which saw prices jump more than $2.0 a barrel, said Jason Hughes, head of premium client management for IG Markets Singapore.
“Trade remains thin and the main focus is on US budget talks,” he told AFP.
Republicans and Democrats remained deadlocked even as US President Barack Obama cut short his Christmas holiday and flew back to Washington to attempt to broker an 11th-hour deal over the looming deadline for simultaneous, sharp increases in taxes and cuts in spending.
US Treasury Secretary Timothy Geithner has warned that should the White House and US lawmakers failed to agree on a budget compromise to prevent the economy plunging over the “fiscal cliff, then he could not be sure when the money would dry up.”
He said the US government would reach its 16.39-trillion-dollar debt limit — a Congress-imposed ceiling — on Monday.