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Oil prices dropped on Friday, following the failure of US President Obama and Republicans on reaching an agreement on a six-week extension to the nation’s borrowing authority.

Brent crude was down by 28 cents at $111.52, while US oil traded 34 cents lower at $102.67 per barrel, according to Reuters.

The prices went up in the early session, with hopes of an ending to the partial government shutdown as the two sides kept discussing.

Extension of the borrowing authority would postpone a possible default and resolve the budget gridlock, which has clouded the demand outlook in the world’s biggest oil consumer.

With this news the Brent touched a four-week high of $112 per barrel.

Regarding supply risk concerns in the Middle East and North Africa, they supported the oil price, which was boosted amid Libyan Prime Minister Ali Zeidan’s kidnapping on Thursday.

Oil production from Libya, which increased to 700,000 barrels per day in recent months after falling to its lowest level in mid year, has slowed the rise in oil prices.

The prices also jumped $1 on Thursday, following reports of a Twitter posting from the Israeli military that, at first glance, suggested they had just bombed Syrian airports.

The latest monthly report from the Organisation of Petroleum Exporting Countries (OPEC) showed it is reducing its forecast for world oil demand for the fourth quarter of 2013 and into 2014, which created some demand for oil.


Image: Oil prices dropped following the US borrowing authority’s failed talks.

Nri