Oil becalms near $102 as U.S. lawmakers seek deal on debt ceiling

PanARMENIAN.Net - Oil was becalmed near $102 a barrel Tuesday, Oct 15, as U.S. lawmakers tried to hammer out an agreement to raise the government's borrowing limit and avoid a possible default, the Associated Press reports.

Benchmark crude for November delivery was down 4 cents to $102.37 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract gained 39 cents to close at $102.41 on Monday.

The oil price has swung back and forth for days as lawmakers attempt to resolve an impasse that has left the government partially closed and the markets worried about the U.S. defaulting on its debt for the first time. The U.S. has to increase the amount of debt it can sell by Oct 17.

According to AFP, Ken Hasegawa, energy desk manager at Newedge Brokerage in Japan, said even if a deal is reached traders still had concerns about the U.S. economy.

"With the negative and positive factors at balance, the market has focused on the U.S. debt ceiling and government finance problems."

He added that the closure of some parts of the government meant important economic data, including on jobs, has not been collected, which made it "difficult to make bets either way".

"Many people believe the fiscal problem in the US will be resolved somehow. But the resolution may only be a temporary measure. So it should not significantly affect the fundamentals."

Brent crude, the benchmark used to set prices for international crudes used by many U.S. refineries, was down 22 cents at $110.02 on the ICE futures exchange in London.