Oct 1, 2013 12:16 PM by AP (Photo Courtesy: MGN Online)
NEW YORK (AP) - The price of oil slipped below $102 a barrel Tuesday after parts of the U.S. government were ordered to shut down because of a budget impasse in Washington.
Benchmark oil for November delivery fell 97 cents to $101.36 a barrel in midday trading in New York. Brent crude, a benchmark used to price imported crude used by many U.S. refineries, fell $1.41 to $106.96.
Relatively weak oil demand in the U.S. could weaken further if the shutdown curbs economic growth and continues to stop 800,000 federal workers from driving to work, according to Phil Flynn, a senior market analyst at the Price Futures Group.
"A prolonged stalemate could slow the economy and US oil demand," Flynn wrote in a report Tuesday.
The national average price of gasoline fell a penny to $3.39 per gallon, according to AAA, the Oil Price Information Service, and Wright Express. It's the 30th straight day of declines, and the average is now lower than it has been since Jan. 30.
Analysts say lower demand for gasoline in the fall, the switch to cheaper winter blends of gasoline and a smoothly-running refinery system is helping to push prices lower. They expect the price to sink further in the coming weeks.
Later in the day, investors will begin monitoring fresh information on U.S. stockpiles of crude and fuels.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration - the market benchmark - will be out on Wednesday. The EIA says it will continue to operate despite the shutdown for several more days.
Data for the week ending Sept. 27 is expected to show a build of 2.4 million barrels in crude oil stocks and a draw of 1.4 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
In other energy futures trading on Nymex:
- Wholesale gasoline fell 4 cents to $2.58 per gallon.
- Natural gas rose 7 cents to $3.63 per 1,000 cubic feet.
- Heating oil fell 4 cents to $2.93 per gallon.
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