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Oil prices fell in Asia today, with traders taking profits after a recent rally and as US politicians continue to wrangle over a deal to avert the fiscal cliff, analysts said.
New York’s main contract, light sweet crude for delivery in February, fell 70 cents to $89.43 a barrel and Brent North Sea crude for February dropped 45 cents to $109.75.
“After a big rally in price over the last few days people are happy to exit and reap a form of profit while taking risk off the table,” Jason Hughes, the head of premium client management at IG Markets Singapore, said.
“We are also seeing a more cautious approach in Asia just in case US politicians don’t come to a resolution to avoid the fiscal cliff.”
Crude prices rose earlier in the week on a sharper-than-expected fall in US crude inventories as lawmakers appeared to make headway on a deal to avert the huge tax hikes and spending cuts due to take effect at the start of January.
But talks appeared to hit an impasse when top Republican John Boehner pressed ahead with a controversial “Plan B” that extends tax breaks for everyone earning less than $1 million per year.
US President Barack Obama, however, has said he is willing to go no higher than $400,000.
Boehner, who is Speaker of the Republican-controlled House of Representatives, had on Thursday scrapped a vote on the plan as he acknowledged that he did not have sufficient support even from within his own party.
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