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Oil prices were mixed in Asian trade today as investors focused on US budget talks and doubts emerged over a how a bailout deal for debt-strapped Greece would be implemented.
New York’s main contract, West Texas Intermediate (WTI) for January delivery, was down seven cents at $87.11 a barrel in the morning, and Brent North Sea crude for January climbed four cents to $109.91 in volatile trade.
Oil prices are “weighed down... by concerns about key US budget talks”, Phillip Futures said in a market commentary.
“As markets cautiously greeted the news of a deal to release emergency aid to debt-laden Greece, oil traders eyed the looming US ‘fiscal cliff’ as the latest sign struggling fuel demand could face further headwinds.”
US lawmakers are working to hammer out an agreement on the budget for next year that requires painful compromises from both Republicans and Democrats, and negotiations have been marked by bitter political bickering.
If no deal is reached before the end of the year, a poison pill of tax hikes and massive spending cuts, including slashes to the military, comes into effect and would likely send the world’s biggest economy back into recession.
The initial euphoria over the debt deal reached between Greece and its creditors has also died down as both sides move to implement its terms.
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