Crude oil falls to $103 per barrel

Crude oil prices today fell as the partial shutdown of the US Government raised the prospect that demand for crude might slacken.

Benchmark oil for November delivery was down 9 cents at $103.22 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange.

A partial shutdown of the US Government went into effect earlier this week after lawmakers, bitterly divided over President Barack Obama’s healthcare programme, failed to agree on legislation to pay the country’s bills past Monday, the end of the fiscal year.

That forced the Government to shut down non-essential services and stand down 800,000 federal employees. The shutdown entered its fourth day today with no end in sight.

A prolonged halt to Government activities would reduce the demand for energy and result in lower prices of fuels such as gasoline. That would be a boon for drivers but also signal a weak economy.

US crude prices have fallen to their lowest levels in nearly two weeks as the US Government “shutdown fuels concerns of slowing economic growth,” said Alex Young of CMC Markets in an email commentary.

Economic indicators also contributed to lower oil prices.

The Labour Department reported that the number of Americans seeking unemployment benefits remained near six-year low, but while employers are have stopped laying off workers, the creation of new jobs has slowed in recent months.

Also, a survey showed disappointing growth at US service industries. Brent, the benchmark for international crudes, slipped 11 cents to $108.89 in London.

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