Oil falls below $103 as US debt deadline nears

Price of oil falls below $103 a barrel as deadline for Congress to raise US debt limit nears

Associated Press

BANGKOK (AP) -- The price of oil fell below $103 a barrel Tuesday as a budget stalemate in Washington persisted.

Benchmark crude for November delivery fell 8 cents to $102.95 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell 81 cents to close at $103.03 a barrel on the Nymex on Monday.

The U.S. government was forced to partially shut down operations last week after Congress failed to agree on a short-term funding measure to allow the nation to pay its bills past Sept. 30, the end of the fiscal year. Some 800,000 federal workers were furloughed, although some have been called back to their jobs, and nonessential agencies and services were shuttered.

On top of that is the approaching deadline for raising the nation's borrowing limit. If Congress doesn't raise the limit by Oct. 17, the country could face its first-ever debt default, which experts warn could seriously harm the global economy.

Oil traders have gotten jittery in recent days as the deadline approached, and crude prices have fallen.

"We're going to see lower and continue to see lower as long as the US Government can't get back into gear," Carl Larry of Oil Outlooks and Opinions said in an email commentary.

Brent, the benchmark for international crudes, fell 24 cents to $109.44 on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

— Wholesale gasoline fell 0.4 cents to $2.6218 per gallon.

— Natural gas rose 1.8 cents to $3.647 per 1,000 cubic feet.

— Heating oil fell 0.5 cent to $3.0047 per gallon.

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