Investing.com - The U.S. government shutdown weighed on crude oil prices during Wednesday’s Asian session, as market participants priced in expectations of lower demand for fuel and energy products.
On the New York Mercantile Exchange, light, sweet crude futures for November delivery dropped 0.47% to USD101.56 per barrel in Asian trading Wednesday. The November contract settled lower by 0.28% at USD102.04 per barrel on Tuesday.
The impasse between Senate Democrats and House Republicans over the Affordable Healthcare Act resulted in a U.S. government shutdown this week, resulting to a sharp selloff in the U.S. dollar and some commodities.
The current shutdown means temporarily closing down several non-essential government offices and services, while operations such as defense and healthcare will push through. This could result to a loss of 0.1% in GDP per day of the shutdown, possibly causing a decline in energy consumption moving forward.
However, U.S. economic data out Tuesday was encouraging as the ISM manufacturing PMI climbing to its highest level since April 2011. The reading jumped from 55.7 to 56.2 in September, reflecting a stronger pace of expansion in the manufacturing industry.
The prospect of the U.S. Federal Reserve keeping its bond purchases unchanged could also provide support to growth and commodity prices. Last month, the Fed decided against reducing stimulus, as Chairman Bernanke announced that the recovery is still unstable.
Keeping stimulus in place for the rest of the year could keep oil prices afloat in the near term. Elsewhere, Brent oil futures for November delivery on the ICE Futures Exchange fell 0.19% to USD107.57 per barrel.
On the New York Mercantile Exchange, light, sweet crude futures for November delivery dropped 0.47% to USD101.56 per barrel in Asian trading Wednesday. The November contract settled lower by 0.28% at USD102.04 per barrel on Tuesday.
The impasse between Senate Democrats and House Republicans over the Affordable Healthcare Act resulted in a U.S. government shutdown this week, resulting to a sharp selloff in the U.S. dollar and some commodities.
The current shutdown means temporarily closing down several non-essential government offices and services, while operations such as defense and healthcare will push through. This could result to a loss of 0.1% in GDP per day of the shutdown, possibly causing a decline in energy consumption moving forward.
However, U.S. economic data out Tuesday was encouraging as the ISM manufacturing PMI climbing to its highest level since April 2011. The reading jumped from 55.7 to 56.2 in September, reflecting a stronger pace of expansion in the manufacturing industry.
The prospect of the U.S. Federal Reserve keeping its bond purchases unchanged could also provide support to growth and commodity prices. Last month, the Fed decided against reducing stimulus, as Chairman Bernanke announced that the recovery is still unstable.
Keeping stimulus in place for the rest of the year could keep oil prices afloat in the near term. Elsewhere, Brent oil futures for November delivery on the ICE Futures Exchange fell 0.19% to USD107.57 per barrel.