After the initial optimism following Tuesday's deal to resolve the fiscal cliff, oil futures dipped in price early on Thursday morning.
While the U.S. economy was eventually spared from the nearly $600 billion in automatic tax increases and spending cuts scheduled to go into effect starting January 1, Reuters reports that this success is being overshadowed by the next looming budget debate.
The U.S. Treasury is already preparing to implement measures to raise added funds, but will need to exceed the borrowing limits set by the national debt ceiling within the next two months, sparking yet another major battle between Democrats and Republicans.
"Significant longer-term budgetary issues still need to be addressed, and this problem will be returning to the forefront of trader concerns within the next couple of months," said a research note from Jefferies Bache.
By 11:40 New York time, West Texas Intermediate crude oil prices fell 3 cents, a 0.03 percent decline to $93.12 per barrel. Meanwhile, Brent crude oil dropped 20 cents, falling 0.18 percent to $112.31 per barrel.
The Wall Street Journal notes that the spread between Brent and U.S. oil prices has fallen in recent weeks, particularly as the Seaway pipeline expansion aimed at easing the glut at Cushing, Oklahoma, nears completion.
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