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Brent Remains Above $109, Budget Showdown Weighs

ByBenzinga
AuthorBenzinga
Published 10/08/2013, 02:44 PM
Updated 05/14/2017, 06:45 AM

Brent crude oil remained steady above $109 on Tuesday morning. The commodity traded at $109.43 at 5:00 GMT as production in the Gulf of Mexico resumed following preemptive closures to brace for Tropical Storm Karen.

According to CNBC, oil and gas production in the Gulf of Mexico was rising to near normal levels on Monday afternoon following the storm. Reports that Karen could grow into a massive tropical storm caused several energy firms in the area to shut down and evacuate workers. Preparing for the storm cut oil output and natural gas production by two thirds.

However, the storm passed with minimal damage, leaving the firms to reopen and ramp up production on Monday.

Worries about the US' fast approaching debt ceiling deadline kept Brent prices under pressure as markets braced for the possibility that the US could face a sovereign debt default. Congress has been at a stalemate for days with Democrats and Republicans unable to pass an emergency spending bill that is needed to restart Federal government operations.

The deadlock has extended into a second week as the two sides attempt to wrap the nation's budget negotiations up with the deal. However, Republicans are adamant about including reforms to Obamacare in the terms for raising the debt ceiling, something President Obama has said he absolutely won't approve.

With nearly one million workers furloughed and the government showing no signs of compromise, many worry that enough damage to the US economy has been done and that the nation's oil appetite will be depressed even after the standoff has ended.

BY Laura Brodbeck

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