Oil prices rebounded in Asian trade today on hopes of a possible breakthrough in the US budget crisis after the White House moved to convene meetings with the leading members of Congress.

New York’s main contract, West Texas Intermediate for delivery in November, was up seven cents at $101.68 in the mid-morning trade, while Brent North Sea crude for November delivery gained seven cents to $109.13.

WTI crude declined $1.88 and Brent crude fell $1.10 in New York yesterday after the latest US crude stockpiles report showed a surprise build-up of 6.8 million barrels, but analysts said developments in Washington remain the main focus.

There are “continued concerns regarding the US budget impasse that would reduce demand for oil in the world’s largest oil consumer,” said Vanessa Tan, investment analyst at Phillip Futures in Singapore.

Obama meets Congress members

President Barack Obama had yesterday sat down with the House of Representatives Democrats and invited all other lawmakers to the White House to work through budget disagreements that have led to the partial shutdown of the government.

Scenarios for an exit to the shutdown include a short-term government funding bill and a temporary debt ceiling rise, but there have been no consensus on any of these so far.

Failure to lift the debt ceiling by October 17 deadline will mean the government is unable to pay its bills or service its debts, causing a default that analysts have warned could send the world economy back into recession.

“There is still no clarity as to whether the White House and the Republicans are closer towards a compromise that could result in a continuing resolution or a decision to lift the federal debt ceiling,” DBS Bank said in a note.

“For now, a continuing resolution looks more likely if the both parties can move away from (Republican demands to cut Obama’s healthcare law) and work towards spending cuts,” it said.

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