The price of oil fell today as the partial shutdown of the US government raised the prospect that demand for crude might slacken.
Benchmark oil for November delivery was down 9 cents to USD 103.22 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract for fell 79 cents to close at USD 103.31 a barrel on the Nymex yesterday.
A partial shutdown of the US government went into effect earlier this week after lawmakers, bitterly divided over President Barack Obama's health care program, failed to agree on legislation to pay the country's bills past Monday, the end of the fiscal year.
That forced the government to shut down nonessential services and stand down 800,000 federal employees. The shutdown entered its fourth day today with no end in sight.
A prolonged halt to government activities would reduce demand for energy and result in lower prices of fuels such as gasoline. That would be a boon for drivers but also signal a weak economy.
US crude prices have fallen to their lowest levels in nearly two weeks as the US government "shutdown fuels concerns of slowing economic growth," said Alex Young of CMC Markets in an email commentary.
Economic indicators also contributed to lower oil prices. The Labor Department reported that the number of Americans seeking unemployment benefits remained near six-year lows, but while employers are have stopped laying off workers, the creation of new jobs has slowed in recent months.
Also, a survey showed disappointing growth at US service industries.
Brent, the benchmark for international crudes, slipped 11 cents to USD 108.89 in London.
In other energy futures trading on Nymex: - Wholesale gasoline fell 0.8 cent to USD 2.632 per gallon. - Natural gas rose 1.4 cents to USD 3.513 per 1,000 cubic feet.
- Heating oil fell 0.2 cent to USD 3.002 per gallon.
