Boehner

Oil prices again fell today, as the ongoing discussion to resolve a budget crisis in US came to a halt, once again escalating the concern over a sluggish demand outlook in the world’s largest oil consumer.

Brent crude dropped by 57 cents to $109.63 a barrel, while US oil plunged to $88.93 and traded $1 lower at $89.13, reported Reuters.

House of Representatives Speaker John Boehner could not manage to unite Republican lawmakers on Thursday, in order to garner support to impose $600bn worth of automatic tax hikes and spending cuts.

Only 11 days are now left to avert a crisis that threatens to push the US economy into recession in 2013.

Analysts, however, predict that the overall outlook for oil demand is expected to improve in 2013, with signs that US economy will revive.

According to the US Commerce Department, in the third quarter, the economy developed faster at a 3.1% annual rate, the fastest since late 2011 and surpassed the 1.3% rate of the second quarter.

On the other hand, the manufacturing output in the mid-Atlantic region also increased in December.

The crisis in the Middle East region is another significant factor that is pushing prices higher.

During most of the year, concerns regarding oil supplies and tensions about Iran’s controversial nuclear programme have pushed Brent to a high of $128 a barrel and a maintained a consistent level of more than $100.


Image: House of Representatives Speaker John Boehner. Photo courtesy of United States House of Representatives.