Oil near $100 as relief over US debt deal fades

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Posted: Thursday, October 17, 2013 12:00 am | Updated: 5:04 pm, Tue Mar 25, 2014.

NEW YORK (AP) - The price of oil fell near $100 a barrel on Thursday as relief faded over a U.S. deal to avoid default and amid apparent progress in talks about Iran's nuclear program.

By midday, benchmark crude for November delivery was down $1.85, or 1.8 percent, to $100.44 a barrel on the New York Mercantile Exchange after dropping as low as $100.09. Oil last traded below $100 a barrel on July 3.

Oil gained more than $1 Wednesday, driven by optimism over the eleventh-hour deal reached by leaders in Congress to reopen the government through Jan. 15 and increase the nation's borrowing authority through Feb. 7. The rally has lost momentum, however, with investors left to access the impact of the brinksmanship on the economy and worried that the deal only postpones the debt problem.

"More important for oil markets, S&P estimates that the closure of the government will result in a 0.6% reduction in Q4 GDP growth," wrote Addison Armstrong, senior director of market research at Tradition Energy, in a note to clients.

Also helping to push prices lower, meanwhile, was the improvement in negotiations on Iran's nuclear program between the Islamic Republic and six world powers. The two sides agreed to meet again in Geneva in early November.

Iran's oil exports have dropped substantially over the past years because of U.S.-led economic sanctions, one of the reasons usually cited by analysts for rising oil prices.

Elsewhere, a report from the industry-funded American Petroleum Institute said that U.S. stocks of crude oil rose by 5.9 million barrels last week, about twice the build expected by analysts.

The release of the weekly report from the Energy Department's Energy Information Administration - which would have out Thursday - is uncertain because of the partial government closure of the past two weeks. The EIA's report is considered the market benchmark.

In other markets, Brent crude's December contract, the benchmark used to set prices for international crudes, was down $1.20, or 1.1 percent, to $109.39 on the ICE Futures exchange in London.

On the Nymex:

- Wholesale gasoline dropped 4 cents to $2.66 a gallon.

- Natural gas fell 2 cents to $3.75 per 1,000 cubic feet.

- Heating oil fell 5 cents to $2.99 a gallon.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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