All data is delayed
See More

Oil dips as fiscal cliff approaches

Dec 23 2012 21:15

Bangkok - Oil prices fell on Monday, just eight days before the US arrives at the "fiscal cliff" deadline without a budget agreement in place.

If no deal is reached by January 1, steep tax increases and government spending cuts will automatically take effect that will jar the U.S. economy and potentially throw it into recession, economists have warned.

Benchmark oil for February delivery fell 14 cents to $88.52 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $1.47 on Friday to finish at $88.66 per barrel in New York, the contract's lowest point in three weeks. It dropped to $87.96 per barrel at one point Friday.

Oil prices tend to drop when a major world economy is threatened by a downturn, which more often than not leads to reduced demand for energy.

It was little more than a week ago when news emerged that President Barack Obama and House Speaker John Boehner had significantly narrowed their differences and appeared within striking distance of an agreement. Since then, however, negotiations have stalled with Obama and Congress on a short holiday break.

Brent crude, used to price international varieties of oil, fell 6 cents to $108.91 per barrel in London.

In other energy futures trading on the New York Mercantile Exchange:

Natural gas lost 2 cents to $3.43 per 1,000 cubic feet.

Heating oil rose marginally to $3.0124 a gallon.

Wholesale gasoline fell 2 cents to finish at $2.7355 a gallon.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

commodities  |  markets  |  oil  |  us fiscal cliff



Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


With infrastructure spending having been identified as one of the key focus areas of the National Development Plan, tradesmen will continue to play a critical role in growing the South African economy through their skills..

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

A 30% a month return on investment is:

Previous results · Suggest a vote