LONDON: Oil prices fell on Monday on growing concerns that the US budget crisis could spiral into a debt default which would hit the global economy hard, traders said.
New York's main contract, West Texas Intermediate for delivery in November dropped 91 cents to $102.93 a barrel.
Brent North Sea crude for November lost 84 cents to stand at $108.62 a barrel in London afternoon deals.
The US government shutdown was dragged into a seventh day as a series of marathon talks between Democrats and Republicans in Washington failed to reach a resolution to the stand-off.
US Treasury Secretary Jack Lew warned on Sunday that Congress was "playing with fire" as Republicans raised the threat of a US default if President Barack Obama refuses to negotiate on spending.
Lew said the United States will run out of cash on October 17, and with only $30 billion (22 billion euros ) in hand to meet obligations that can run to $60 billion a day, it will quickly default.
Concern is rising that the shutdown could threaten a fragile economic recovery in the US -- the world's biggest consumer of crude oil -- with some analysts suggesting it could push the country's economy back into recession.
"Both sides have become more entrenched in their positions, implying that any agreement on raising the debt ceiling required by October 17 also looks out of reach," French bank Credit Agricole said in a note to investors.
"Markets are set to become increasingly nervous over coming days suggesting an increase in risk aversion," it added.
Investor eyes are on also the US Federal Reserve, which on Wednesday will release minutes from its September policy meeting.
The minutes will be pored over for clues about the future of its vast stimulus programme, which has been credited with fuelling a global equities rally for most of the year.
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