- POSTED: 08 Oct 2013 03:49
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Oil prices declined on Monday as production resumed in the Gulf of Mexico following a tropical storm that had forced companies to suspend output for safety reasons.
NEW YORK: Oil prices declined on Monday as production resumed in the Gulf of Mexico following a tropical storm that had forced companies to suspend output for safety reasons.
The market was also seeing pressure from the continued political paralysis over the budget in Washington, as the partial government shutdown entered the second week.
US crude benchmark West Texas Intermediate for November delivery fell 81 cents to $103.03 a barrel on the New York Mercantile Exchange.
European benchmark Brent oil for November delivery rose 22 cents to $109.68 a barrel.
The price fall partly stemmed from the passing of tropical storm Karen without major damage to energy infrastructure in the oil-rich waters of the Gulf of Mexico. Producers had shut in about 62 percent of the region's oil production due to the storm.
"Production will be returning to normal within the next few days, and as a result, the market is not expecting any significant impact on crude oil supply," said Andy Lipow, a Houston energy consultant.
A third of capacity in the region was still shut in early Monday afternoon, according to Dow Jones Newswires. But oil companies were in the process of flying workers back to platforms.
Investors meanwhile remained worried that the paralysis in Washington will prevent the increase of the US debt ceiling by an October 17 deadline, forcing a possible default on US debt that could wreak economic havoc, damaging oil demand.
"The primary focus remains on Washington," said Kyle Cooper, managing partner at IAF Advisors in Houston.