Oil ends lower; US shutdown jitters reverberate
U.S. oil ended the session sharply lower on Monday, as a partial U.S. government shutdown that entered a second week stirred fears about demand, undercutting supportive news about a production in the Gulf of Mexico.
U.S. crude for November delivery settled down 81 cents to $103.03 a barrel in electronic trading on the New York Mercantile Exchange. The contact rose 53 cents to close at $103.84 on the Nymex on Friday. Brent crude was flat above $109.
The U.S. was forced to curtail government operations last week after a politically divided Congress failed to approve a short-term funding measure to allow the nation to pay its bills past the end of its fiscal year on Sept. 30. As a result, 800,000 federal workers were furloughed and scores of nonessential services were halted. Prices were under pressure since energy would be needed less in a prolonged halt to government activities.
Now, Congress faces another deadline that could prove highly damaging to the U.S. economy if missed. The nation's debt ceiling, also known as its borrowing limit, must legally be raised before Oct. 17.
Meanwhile, a third of U.S. crude oil production remained shut on Monday, which normally would boost the price of oil. A total of 35.08 percent of oil production, or 491,162 barrels per day (bpd), remains shut in the Gulf as oil producers were restoring production shut on Thursday and Friday as Karen menaced the northern Gulf, the U.S. Energy InformationAdministration said.
--Reuters and the Associated Press contributed to this story.
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