Brent Rises On Hopes Of A US Budget Deal
Brent crude oil came down from a four week high on Friday morning after spiking on news that Republicans had offered a deal that could end the budget battle.
The commodity traded at $111.54 at 5:24 GMT as investors looked for further movement in the US' debt standoff.
After Republican leaders and President Barack Obama met to discuss the budget in person for the first time since the shutdown, Republicans offered to extend the government's borrowing liming for a few weeks, which would put off the possibility of the US defaulting on loans.
The deal marks the first real sign of progress between the two sides, and the news rallied oil prices.
Geopolitical worries also supported Brent prices after an incident in Libya renewed concerns about the stability of the Middle East. On Thursday, Libyan Prime Minister Ali Zeidan was abducted from his hotel room by militia associated with a rival politician. Zeidan was released hours later, but his capture highlighted the country's fragile state.
The CNBC reported that oil prices also got a $1.00 lift on Thursday after a Twitter post from the Israeli military was misinterpreted to mean that it had bombed Syrian airports.
Gains from worries about the Middle East were mitigated by reports from OPEC which showed a reduced demand forecast for the fourth quarter of 2013 and the beginning of 2014. The report said the organization's production surpassed next year's global appetite despite a reduction in both Iraqi and Libyan output.
The gloomy outlook for 2014 will pose a challenge for OPEC members, as rising production from nations outside the organization will make it difficult to keep prices above the preferred $100 mark.
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