Brent Retreats From Two Week High On Shutdown Woes
Crude oil prices jumped overnight after news that Trans Canada Corp's Keystone XL Glulf Coast pipeline would open toward the end of the year. The pipeline will carry crude oil from Crushing, Oklahoma to Nederland, Texas.
However, the abrupt surge was followed by a fall as the US government entered its third day with much of the Federal government at a halt. Brent crude oil traded at $108.92 on Wednesday morning at 5:38 GMT as investors worried that a prolonged shutdown could hamper the US' appetite for crude.
A round of meetings on Tuesday did little to break the stalemate between Democrats and Republicans in Washington, leaving the emergency spending bill no closer to being passed. The Republican-led House of Representatives isn't willing to pass the bill without amendments to the Affordable Healthcare Act, but the Democratic Senate and President Barack Obama have both stood firm on their decision to reject any changes to the healthcare plan.
The political battle in Washington has raised questions about whether or not the government will be able to agree on the nation's budget, which will come due this month. If another gridlocked decision keeps the nation from raising the debt ceiling and paying its bills, many worry that another credit downgrade could be on the horizon.
CNBC reported that US jobs data disappointed and added to the pressure on Brent prices. A report showed that US private employers added only 166,000 jobs in September, below analyst expectations. The figure indicates only tepid growth in the labor market.
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