Oil prices decreased today after Republicans in the US House of Representatives were seen supporting a two-year budget deal negotiated behind closed doors, creating a weaker sentiment for oil.
Brent crude dropped by 21 cents to $109.49 a barrel, while US crude was down by six cents to settle at $97.38 a barrel, reported Reuters.
A deal on a tentative budget is expected this week which could remove fiscal uncertainty ahead of next week’s much-anticipated Federal Reserve meeting.
US crude prices shrank after a sharp rise in the US gasoline inventories, which worried traders with weak domestic demand ahead of the holiday season.
Brent prices also slipped after Libyan officials said that three oil ports which previously shipped around 600,000bpd of oil are expected to resume this weekend.
Libya’s oil shipments decreased to around 110,000 bpd, from more than 1mmbpd in July due to seizures of ports and oil fields by protesters demanding a bigger share of oil exports.
Prices were also under pressure with two new pipelines belonging to TransCanada and Shell set to drain oil from the Cushing depot in the next few months.
Traders are also keeping an eye on the progress of talks between Tehran and six world powers about implementation of a landmark nuclear deal that could ease sanctions on Iranian oil and increase supply.
Energy Information Administration data showed crude inventories fell 10.6 million barrels last week to 375 million barrels, giving a boost to the prices. Investors are waiting for the US weekly jobless claims data, expected later today, which could show a continued recovery for the world’s biggest economy.
Oil also may gain support from decreasing OPEC output and continued chaos in Libya which clouds the country’s production outlook.
Image: Brent’s value dropped on tapering concerns. Photo courtesy of freedigitalphotos.net.