Oil Falls From Four-Month High Amid Debt-Ceiling Talks
By Mark Shenk
Oil dropped from the highest level in almost four months on concern that debt-ceiling talks will harm the U.S. economy and as a gauge of New York-area manufacturing contracted for a sixth straight month.
Futures in New York declined as much as 0.6 percent after President Barack Obama said yesterday he won’t bargain with Republicans over raising the government’s debt limit and called for separate discussions on spending cuts. The Federal Reserve Bank of New York’s general economic index fell to minus 7.8 this month from a revised minus 7.3 in December.
“Concerns about a possible U.S. default are starting to be felt,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “This is going to roil all the markets.”
Crude oil for February delivery decreased 30 cents, or 0.3 percent, to $93.84 a barrel at 11:39 a.m. on the New York Mercantile Exchange. The contract increased to $94.14 yesterday, the highest settlement since Sept. 18. Prices are down 4.9 percent from a year earlier.
Brent for February settlement dropped 71 cents, or 0.6 percent, to $111.17 a barrel on the London-based ICE Futures Europe exchange. February futures expire tomorrow. The more- active March contract fell 58 cents, or 0.5 percent, to $110.37.
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