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Shutdown Worries Weigh On Brent Prices

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Shutdown Worries Weigh On Brent Prices

Oil prices continued to fall on Wednesday as the US government remained shut down for a second day. The halt has forced nearly one million government workers to take unpaid leave and will likely reduce the number one oil consuming nation's appetite for crude.

Brent crude oil traded at $107.58 at 5:30 GMT on Wednesday morning as the US government showed no signs of nearing the agreement needed to resume operations.

Analysts have predicted that the shutdown will be short lived, however commodity markets have been hit harder as investors remain cautious. With the Republican-led house and the Democratic Senate unable to agree on anything except that the other is to blame for the shutdown, markets will continue to retreat until a the length of the halt is more certain.

Related: Market Primer: Wednesday, October 2: Asian Markets Optimistic About A Short Shutdown

CNBC reported that the American Petroleum Institute released data which showed US oil inventories were up 4.55 million barrels last week, which added pressure to crude prices.

Strong manufacturing data on Tuesday helped prop up oil prices, but only minimally. Since the indicator measured past progress, it did little to quash worries about the future of the US economy and the impact the shutdown will have on oil demand.

Moving forward, investors will be looking for a commercial crude inventory report from the US Energy Information Administration, due out on Wednesday morning. The data is expected to indicate that US inventories increased by 2.3 million barrels while gasoline stockpiles fell. Despite the government shutdown, the EIA is expected to continue operating and releasing data until at least October 11.

Posted-In: American Petroleum Institute US Energy Information AdministrationNews Commodities Forex Global Markets Best of Benzinga

 

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