Crude-oil futures eased modestly on Monday as investors focused on risks to oil demand if the U.S. doesn’t avoid falling off the so-called fiscal cliff of tax hikes and spending cuts that will occur in January if politicians are unable to strike a budget deal.
Benchmark U.S. crude oil for December delivery fell 24 cents, or 0.3%, to $85.82 a barrel during European trading hours.
The decline came after oil futures logged a gain of more than 1% last week, and rose 98 cents on Friday to settle at $86.07 a barrel in the regular New York Mercantile Exchange session.
“In the short term, we expect oil prices to be relatively range-bound, as supply and demand dynamics are fairly balanced,” said Barclays analyst Sudakshina Unnikrishnan.
“However, in the newly entered post-election period, we see the potential for a political premium,” said Unnikrishnan, also citing geopolitical issues that could boost oil prices.
Greece’s efforts to secure its next disbursement of financial aid was also on investors’ mind after the country’s parliament early Monday morning passed its 2013 austerity budget. The move, widely seen as a prerequisite for receiving the next tranche of bailout money, comes ahead of a meeting of euro-zone finance ministers scheduled to meet later in the day.
Ministers, however, are seen as unlikely to reach an agreement Monday on releasing the latest round of aid to Greece.
Meanwhile, Deutsche Bank analyst Michael Lewis said he expected oil products to be “the strongest part of the energy complex as the year-end approaches.”
Among other energy products Monday, heating oil for December delivery fell 0.1% to $3.00 a gallon, and gasoline for delivery in the same month rose 0.1% to $2.70 a gallon.
Natural-gas futures for December delivery traded down 0.7% at $3.47 per million British thermal units.
Marketwatch
