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Oil falls as DC budget showdown, improved supply hit prices

Friday, 11 Oct 2013 | 2:40 PM ET
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U.S. crude oil futures slipped on Friday as the lack of a definitive plan to end the U.S. budget stalemate was expected to weigh on the economy and prolong an erosion of oil demand in the world's largest oil consumer.

U.S. Senate Republicans said a meeting with President Obama was productive, but no deal was reached on raising the debt limit or on the government shutdown, which will enter its third week next week. U.S. consumer sentiment deteriorated in October to its weakest in nine months as the government shutdown weighed on the economy.

Brent oil prices were weighed down by an outlook for improved supply. The International Energy Agency (IEA) said non-OPEC supply would rise by an average of 1.7 million barrels per day (bpd) in 2014, the highest annual growth since the 1970s.

The IEA, the West's energy watchdog, said in a monthly report the United States would become the world's largest oil producer next year, compensating for an anticipated disruption in OPEC production.

Brent futures were more than $1 lower to trade near $111 per barrel, after closing $2.74 higher at $111.80. The benchmark was on track for its biggest weekly gain in six weeks. U.S. crude settled down 99 cents to $102.02 per barrel, its fourth weekly decline in five weeks.

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