Oil hovers near $102 as US deadline looms

Updated at: 10/14/2013 12:05 PM
By The Associated Press

Oil hovered near $102 a barrel Monday amid alternating hope and uncertainty about the looming deadline for U.S. lawmakers to reach an agreement over the government’s borrowing limit and shutdown.

Benchmark crude for November delivery was up 35 cents to $102.37 a barrel in midday trading in New York. The contract traded below $102 for much of the morning but rose along with the U.S. stock market around midday.

Brent crude, the benchmark used to price international crudes used by many U.S. refineries, was down $1.03 to $110.25 per barrel.

The price of oil "continues to gyrate around speculation and rumor regarding the shutdown of the U.S. government," wrote energy analyst Stephen Schork in a report.

The price has swung back and forth for days as lawmakers try to resolve an impasse that left the government partially closed and the markets worried about the U.S. defaulting on its debt for the first time.

U.S. retail gasoline prices continued to slip slightly, but a six-week-long decline started to slow. The national average fell less than a penny Monday to $3.34 per gallon. The average is 20 cents cheaper than it was a month ago, and 45 cents below last year at this time.

Gasoline prices are sliding because supplies are ample and demand is tepid. They haven’t slid further because oil prices remain relatively high, thanks to strong global demand for oil, especially in China.

Some traders expect the price of oil to fall soon, however, because supplies appear to be plentiful. In its latest quarterly oil market report, the International Energy Agency predicted strong growth in non-OPEC supplies of crude oil, easily outpacing demand growth next year. The Paris-based IEA also said Friday that the United States would overtake Russia next year as the largest non-OPEC producer of liquid fuels.

In other energy futures trading on Nymex:

_ Wholesale gasoline remained unchanged at $2.67 a gallon.

_ Natural gas rose 1 cent to $3.79 per 1,000 cubic feet.

_ Heating oil fell less than a penny to $3.03 a gallon.

AP writer Pablo Gorondi contributed to this report from Budapest.

(Copyright 2013 by The Associated Press. All Rights Reserved.)