22 December 2012, Sweetcrude, Houston – UK Brent crude oil fell toward $109 per barrel on Friday following failure of talks in Washington to avert a ‘fiscal cliff’ before year-end, stoking worries about demand from the world’s biggest oil consumer.
Brent crude was down 80 cents to $109.40 a barrel by early Friday morning, although the front-month price was set to mark a second weekly rise. US crude futures were at $88.96, down $1.17, after slipping as low as $88.93.
“The latest news that came out just a few hours ago has caused the broader markets to sell,” Reuters quoted IHS Purvin & Gertz managing director Victor Shum as saying.
“There’s a view that it’s a setback for talks between the Republicans and the White House.”
House of Representatives Speaker John Boehner faced an embarrassing setback on Thursday when he failed to unite his Republican lawmakers behind an effort designed to extract concessions from President Barack Obama in talks on the fiscal cliff.
According to Reuters, this cast more uncertainty on the year-end budget talks aimed at preventing across-the-board tax hikes and spending cuts that could push the US economy into recession next year and hurt its fuel demand.