The price of oil slipped below US$104 yesterday as the US government shutdown continued and after a report showed a rise in US crude inventories.By early afternoon in Europe, the benchmark oil contract for November delivery was down 15 cents to $103.95 a barrel in electronic trading on the New York Mercantile Exchange.
Markets have been weighed down this week by the partial shutdown of the US government after a congressional dispute over funding for President Barack Obama's health care programme. There are concerns that a prolonged halt to government activities could reduce demand for energy and hurt confidence in the economy."The US government shutdown continues to dominate the markets, weighing on market sentiment," said a report from analysts at Sucden Financial Research in London.
Economic indicators did not help, either. The Labour 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.Meanwhile, the Energy Department's Energy Information Administration said that US stockpiles of crude oil rose 5.5 million barrels, to 363.7 million barrels, last week. That was more than twice as much as market expectations and suggested weak demand.
Yesterday's drop in the oil price came after strong gains Wednesday, when it rose more than US$2 a barrel–the most in two weeks–on the prospect of more oil shipping between a key US Midwest hub and the Gulf Coast.Brent crude, a benchmark used to price imported crude used by many US refineries, was up 52 cents to US$109.71 in London.
AP