Saturday November 22, 2014

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Oil prices steady hours before US political leaders face deadline to avoid the 'fiscal cliff'


Oil prices were nearly unchanged Monday, as budget talks between President Barack Obama and lawmakers in Washington neared the "fiscal cliff" deadline without a deal.

Benchmark oil for February delivery rose 1 cent at midday Bangkok time to US$90.81 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 7 cents to finish at $90.80 per barrel in New York on Friday.

The "fiscal cliff" refers to higher taxes and lower government spending that will kick in starting Tuesday if Republicans and Democrats can't hammer out a budget compromise by Monday night. Worries over the "fiscal cliff" have pushed U.S. stocks down for five trading days in a row.

Economists have warned that the U.S. economy could be thrown into recession if the tax hikes and spending cuts go into effect $536 billion in tax increases that would touching nearly all Americans and a loss of $110 billion in government spending.

If the deadline passes without a deal, the U.S. won't immediately sink into recession. Lawmakers can repeal the tax hikes and spending cuts retroactively if a deal is reached a few weeks after the New Year's deadline.

In London, Brent crude, used to price various kinds of foreign oil, fell 5 cents to finish at $110.57 a barrel on the ICE Futures exchange.

In other energy futures trading on the New York Mercantile Exchange:

Wholesale gasoline fell 0.4 cents to $2.7958 a gallon.

Heating oil rose marginally to $3.022 a gallon.

Natural gas edged higher to $3.472 per 1,000 cubic feet.


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