Metals News
Oil Falls on U.S. "Fiscal Cliff" Fears, Falling Consumer Confidence
industry news
08:56AM
Source:SMM

NEW YORK, Dec.28 -- Crude prices on Thursday fell on fears of U.S. "fiscal cliff" and an unexpected sharp decline in U. S. consumer confidence for December.

Trading volume on Thursday continued to be extremely light, with turnovers of both Brent and U.S. crude sharply lower than their respective 30-day averages as many investors were still away for holidays.

U.S. President Barack Obama cut short his holiday and returned to Washington D.C. early Thursday, trying to get a budget deal with Republican lawmakers before the deadline of Jan. 1.

But signs showed that little progress had been made in the budget talks. The crude markets were under pressure after Senate Majority Leader Harry Reid criticized Republicans in Congress and said U.S. was heading to "fiscal cliff."

Analysts said that investors would remain cautious until any kind of agreement was reached between the two parties.

Besides, the U.S. consumer confidence for December fell sharply to 65.1 from 71.5 in the month before on fears of"fiscal cliff", the Conference Board said Thursday. The second straight decline in consumer confidence helped push down oil prices.

Other data came in positive, offering support to limiting oil losses. The Labor Department said U.S. initial jobless claims fell 12,000 last week to the lowest level in more than four years. Meanwhile, U.S. new home sales jumped 4.4 percent in November, hitting the highest level since April 2010.

Oil also got support from expectation of Japan's more stimulus policies and continuing unrest in the oil-rich Middle East.

Japan's newly elected Prime Minister Shinzo Abe said Japan would pursue bold monetary and flexible fiscal policies, as well as a growth strategy to encourage private investment.

Light, sweet crude for February delivery lost 11 cents, or 0.12 percent, to settle at 90.87 dollars a barrel on the New York Mercantile Exchange. Brent crude for February delivery slipped 27 cents, or 0.24 percent, to close at 110.80 dollars a barrel.

 

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