Monday, November 12, 2012

Oil down on worry about US fiscal cliff

The price of oil fell slightly Monday as global economic news took a back seat to uncertainty about the looming fiscal cliff in the U.S.

A combination of tax hikes and government spending cuts will take effect Jan. 1 unless President Barack Obama and Congress can reach a compromise to avert it. Economists believe the impact of the fiscal cliff could hurt growth in the world's largest economy.

Benchmark oil fell 50 cents to $85.57 per barrel.

Meanwhile, China's export growth picked up in October, which is another sign of improvement in its economy. That could help support demand for oil and other commodities.

But Japan's economy contracted in the latest quarter, which could indicate that it may be in a recession like many European countries.

Most traders, however, are focused on the U.S. budget issues. "That's going to start to really become the primary driver in the market in the next month," said Gene McGillian, an oil analyst at Tradition Energy.

At the pump, the national average price for gasoline fell less than a penny overnight to $3.437 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That's nearly 37 cents less than a month ago and only about half a cent more than a year ago.

Brent crude, which is used to price international varieties of oil, dropped 33 cents to finish at $109.07 per barrel in London.

Among other energy futures on the New York Mercantile Exchange:

? Heating oil fell less than a penny to end at $2.999 per gallon.

? Gasoline futures dropped 2.29 cents to end at $2.676 per gallon.

? Natural gas rose 6.7 cents to end at $3.57 per 1,000 cubic feet.

Source: http://news.yahoo.com/oil-down-worry-us-fiscal-cliff-171417955--finance.html

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