Preoccupations about the reduced pace of development and growth in the U.S. because of the government shutdown pulled down West Texas Intermediate crude oil futures on Thursday, according to Bloomberg.
The energy commodity fell from its top price in nearly 14 days as concerns spread about the political impasse in the world's largest economy. U.S. President Barack Obama conducted talks on Wednesday with his congressional peers, but those discussions did not solve the disagreement.
Concerns are growing that the feuding parties will run into similar issues in less than three weeks when the need arises to conduct negotiations regarding the debt ceiling.
"Oil has been under pressure with the gloomy economic picture, and in the past few trading sessions with the U.S. government shutdown, which may slow oil demand," analyst Myrto Sokou with Sucden Financial Ltd. in London told the publication on Thursday.
At 10:26 a.m. on Thursday, WTI crude oil futures fell 0.5 percent, a 52-cent loss to $103.58 per barrel. At 10:27 a.m., Brent crude oil futures edged up 0.23 percent, a quarter gain to $109.44 per barrel.
Supplies of the energy commodity rose by 5.5 million barrels last week in the U.S., according to data released on Wednesday by the U.S. Energy Information Administration. That pushed past forecasts of increases of 2.5 million barrels.
The failed negotiations in Washington are keeping roughly 800,000 federal employees from working while closing many U.S. government operations.
Chinese data benefits energy commodity
Reuters reports stronger data released by the globe's second-largest consumer prompted the energy commodity to climb on Thursday.
The services sector of China developed at its fastest rate in about six months in September in response to surging demand. That solidified beliefs in the strengthening of the world's second-largest economy.
"With the turnaround in economic indicators in a key emerging market economy like China, we can be positive that demand conditions for oil are going to be benign," analyst Harry Tchilinguirian with BNP Paribas told Reuters on Thursday.
Iran moves toward diplomacy
A brighter optimism is spreading for oil-rich Iran and its nuclear ambitions as the Middle-Easter nation is under sanctions levied by western nations.
Reuters reports Secretary of State John Kerry said Iran must demonstrate that it is willing to close a standoff. Iran is slated to exhibit how it will solve the nuclear impasse at discussions with five permanent members of the U.N. Security Council and Germany, which are colloquially known as P5 + 1. Those meetings are slated for later this month in Geneva.
"If there is progress in the P5+1 talks with Iran, that will put some pressure on crude oil prices," Olivier Jakob with Petromatrix in Zug, Switzerland told Reuters on Thursday.
Tropical Storm Karen closely watched in Gulf of Mexico
The price of crude oil futures is likely to be impacted by Karen, a tropical storm circulating in the Gulf of Mexico, according to The Wall Street Journal.
Traders and investors were monitoring the system's movement through the region that generates more than 16 percent of the U.S.' supply of crude oil. The National Hurricane Center has issued a warning to metropolitan New Orleans.
Production from off-shore Gulf of Mexico sites averaged roughly 1.229 million barrels per day this past July, according to data provided by the Energy Information Administration. That represents a minimal change from the same period one year earlier.
BP has begun evacuating some employees from its oil-and-gas production platforms in advance of the manifesting storm system. But the company said output will not be impacted.
Additional companies with interests in the region were monitoring developments in the region and said they will decide accordingly on a course of action.
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