Oil fell below $102 a barrel Tuesday as negotiations on Iran's nuclear program got underway in Geneva, and U.S. lawmakers tried to hammer out an agreement to raise the government's borrowing limit and avoid a possible default.
By early afternoon, benchmark crude for November delivery was down 80 cents to $101.61 a barrel on the New York Mercantile Exchange. Oil fell to $101.22 earlier.
The price of oil has swung back and forth for two weeks as lawmakers attempt to resolve an impasse that has left the government partially closed and the markets worried about the U.S. defaulting on its debt for the first time. The U.S. has to increase the amount of debt it can sell by Oct. 17.
On Tuesday, House GOP leaders floated a plan to fellow Republicans to counter an emerging Senate deal to reopen the government and forestall a default on U.S. obligations. But the plan got mixed reviews from the GOP rank and file.
The start of talks in Geneva on Iran's nuclear program between the Islamic Republic and Western powers also weighed on prices.
Traders are speculating about the end of U.S.-led sanctions against Iran further down the road, allowing Tehran to increase oil exports which have fallen by over 1 million barrels a day over the past two years.
The Geneva talks "should provide some better assessment about whether Iran is ready to do something else than talk," said analyst Olivier Jakob of Petromatrix in Switzerland.
Brent crude, the benchmark used to set prices for international crudes used by many U.S. refineries, was down 75 cents at $110.29 on the ICE futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline was flat at $2.66 a gallon.
— Natural gas fell 2 cents to $3.80 per 1,000 cubic feet.
— Heating oil lost 1 cent to $3.03 a gallon.