Crude oil prices fall on US data
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LONDON, Dec 4 AFP
December 05 2012, 00:41AM
Crude prices have fallen after data showed US manufacturing activity contracted last month, while dealers grow concerned at the lack of progress on a deal to avert the fiscal cliff.
Brent North Sea crude for January dropped $1.04 to $US109.88 ($A105.89) per barrel in London early afternoon deals.
New York's main contract, light sweet crude for delivery in January, shed 72 cents to $88.37 a barrel.
"Crude oil prices continue to be on a consolidation mode, as mixed macroeconomic data from the United States and eurozone, and uncertainty about a potential 'fiscal cliff' dominate the markets," said Sucden analyst Myrto Sokou.
She added: "Due to the lack of US economic indicators, we expect thin trading conditions and further consolidation in the oil market today."
Crude oil prices had diverged on Monday as a weak reading in US manufacturing data for November offset an encouraging rebound in China's manufacturing sector.
The US Institute for Supply Management said manufacturing activity contracted in November in the world's biggest oil consumer, after two straight months of gains. The reading was also the lowest level of activity since July 2009.
Adding to concerns about the United States, Democrats and Republicans blamed each other over their proposals on action to close the huge US deficit.
If a deal is not reached to address the huge tax hikes and spending cuts that are due to come into effect on January 1, the world's biggest economy will likely tip into recession next year - and this would ravage global energy demand.
The White House late on Monday laid into a proposal tabled by the Republicans as not meeting "the test of balance".
The Democrats days before submitted a proposal that Republicans derided as "ridiculous".