Monday, 07 January 2013 12:07
SINGAPORE: Oil prices turned lower in Asian trade Monday as weak energy demand and concerns over more fiscal battles in Washington tempered news of growth in the US jobs market.
New York's main contract, light sweet crude for delivery in February shed 30 cents to $92.82 a barrel in the afternoon while Brent North Sea crude for February delivery dropped six cents to $111.22.
Data on Friday showed that the US economy generated 155,000 jobs in December, and the unemployment rate held at 7.8 percent.
However, a US government report last week showing softer fuel demand outweighed that news, Phillip Futures said in a market commentary.
Weaker US energy demand "added to bearish concerns about oil markets, which have been closely monitoring economic data for signals about consumption, which is under pressure because of the struggling economy", Phillip Futures added.
The US is the world's biggest oil consuming nation and the health of its economy is a key influence on crude prices.
Other analysts said markets remain concerned over more brinkmanship in the US Congress after last week's 11th-hour deal that averted the fiscal cliff of tax hikes and spending cuts that threatened to tip the economy into recession.
While the lawmakers put off the huge tax hikes on many wage earners, agreement on spending cuts was put off until the end of February, when they must also hammer out a deal to raise the country's borrowing limit.
"The bears are worried that US lawmakers will struggle, between now and end-February, to agree on budget spending cuts," DBS Group Research said in a market commentary.
"Essentially, last week's fiscal deal on increasing taxes on America's wealthiest has only ameliorated and not erased fears of a double-dip recession."
Copyright AFP (Agence France-Presse), 2013