Oil mired in the red as US budget fight wears on

Oil mired in the red as US budget fight wears on

Published: Thursday, 3 Oct 2013 | 12:21 PM ET

By: Reuters with CNBC.com

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Crude oil was flat to weaker on Thursday, as concerns about the economic impact of a U.S. government shutdown offset strong data from China and dollar weakness.

Activity in China’s services sector expanded at the fastest pace in six months in September as demand grew, cementing a modest pick-up in the world’s second-largest economy. Meanwhile, the U.S. services sector grew at a slower pace last month, ISM data showed.

Brent crude lost 20 cents to trade above $ 109. U.S. crude fell 70 cents to trade near $ 103.

However, uncertainty on the United States budget and the possibility that it could dent demand kept prices in check.

President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday to try to break a budget deadlock that has shut wide swaths of the federal government, but after more than an hour of talks no breakthrough emerged.The uncertainty about the budget reassured investors that the Federal Reserve would not end its money printing any time soon which hit the dollar.

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Brent crude oil floated near $ 109 a barrel on Thursday on worries that a prolonged U.S. government shutdown would hurt demand in the world’s biggest oil consumer.

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