- POSTED: 01 Oct 2013 03:31
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Oil prices on Monday rallied somewhat from intra-session lows, but ended down amid concerns about a possible US government shutdown.
NEW YORK: Oil prices on Monday rallied somewhat from intra-session lows, but ended down amid concerns about a possible US government shutdown.
US benchmark West Texas Intermediate for November delivery dipped 54 cents to $102.33 a barrel after earlier getting as low as $101.05 a barrel.
European benchmark Brent North Sea crude for November delivery fell 26 cents to $108.37 a barrel.
A partial shutdown at midnight Monday of the US government loomed as congressional negotiators remained far apart from a possible deal to fund government operations.
The drop in prices is due to "perceptions that a US government shutdown will impact demand for oil, and in the process hit the prospects for economic growth in the last quarter of 2013," said CMC Markets analyst Michael Hewson.
Carl Larry, an analyst with Oil Outlooks and Opinions, attributed a rally later in the session to optimism that the US will somehow avert a shutdown.
"Everyone is keeping their fingers crossed that it's going to get resolved before midnight," Larry said.
Larry also cited a number of recent refinery outages, including in Texas and Tennessee, as factors in oil's retreat Monday. Market watchers now expect an increase in US oil inventories in Wednesday's weekly report.
"We've had this spate of refinery problems and that's probably going to allow crude to build a little bit because they weren't using as much," Larry said.