Thin trading and subdued sentiment in the midst of the budget negotiation standstill have pushed oil prices further down. Crude oil (WTI Spot) was at $88.41.
Contracts for February delivery declined by as much as $1.47 to close at $88.66 per barrel, its lowest price in three weeks preceding Friday New York Mercantile Exchange’s electronic trades. During that day the commodity dipped as far as $87.96 a barrel.
If the congress and Obama administration fail to lock in a deal before January 1st,2013 the tax reforms and spending cuts will be implemented with immediate effect. The resulting fiscal cliff could enslave the U.S. economy into deeper recession. This may eventually take a toll on demand for energy resources pushing oil prices further down.
The weakening of the dollar made crude oil a more favorable commodity for trade and investment by the traders using stronger currencies like the Euro. The Euro went up to $1.3231 from $1.3184 between Friday to on Monday.
In London , Brent crude i.e. the trading classification of international varieties of light Brent blend crude oil declined 70 cents a barrel to $108.27. Other energy futures on the New York Mercantile Exchange also declined. Natural gas fell 9.2 cents and was priced at $3.359 for each 1,000 cubic feet. Losing 1.14 cents power gallon Heating oil was priced at $2.9988. Wholesale gasoline declined by 1.18 cents to $2.704 each gallon.