SINGAPORE: Oil prices slipped in Asian trade Thursday as investors fretted about the impact on oil demand of any protracted US government shutdown.
New York's main contract, West Texas Intermediate (WTI) for delivery in November, fell 48 cents to $103.62 in afternoon trade. Brent North Sea crude for November eased 38 cents to $108.81.
WTI had jumped $2.06 in New York trade Wednesday on news about the near-completion of a key US Gulf Coast pipeline, but the upbeat sentiment was short-lived. Brent had risen $1.25 in London trade.
"Markets are closely following developments in the US as the federal government shutdown enters its third day. A continuation of the shutdown will dampen prices," said Sanjeev Gupta, head of the Asia-Pacific Oil and Gas practice at consultancy firm EY.
Talks between President Barack Obama and top Republicans on Wednesday failed to break the impasse, with both sides accusing the other of refusing to negotiate.
The breakdown ensures the world's largest economy heads into a third day of a government spending freeze Thursday, raising fears that the gridlock will continue into the middle of the month and trigger a catastrophic debt default.
Joyce Liu, investment analyst at Phillip Futures in Singapore, said investor gloom over the increasing likelihood of an extended US government shutdown was exacerbated by a lacklustre US jobs report.
Payrolls firm ADP Wednesday said the US private sector added 166,000 jobs in September, below what analysts had expected and too low meaningfully to reduce the jobless rate.
"The worse-than-expectations increase in ADP employment, together with the furlough of about 800,000 due to the government shutdown, do not paint an optimistic future for the US labour market," Liu said.
Prices were also pressured after the US Department of Energy reported that supplies increased by 5.5 million barrels last week, far higher than expectations of a 2.1 million barrel rise and an indication of weaker demand.
Comments
Comments are closed for this article.