BANGKOK – Oil retreated to near $102 a barrel as political leaders in Washington neared an agreement that would allow a short-term extension to the U.S. borrowing limit but leave the partial government shutdown intact.
The price of oil has swung back and forth for days as perceptions about the seriousness of the U.S. budget impasse waxed and waned.
At late afternoon Bangkok time Friday, the crude futures contract for November delivery was down 78 cents at $102.22 a barrel in electronic trading on the New York Mercantile Exchange.
It dropped $1.40 on Thursday and rose by $1.88 on Wednesday.
The White House says President Barack Obama would "likely sign" a short-term extension of the debt ceiling, even if it left the partial government shutdown intact.
Failure to raise the borrowing limit could result in a U.S. default on government bond interest payments, undermining the credibility of assets prized as collateral by banks worldwide and crucial to the functioning of the financial system.
House Speaker John Boehner is talking to Republican rank and file about leaving the shutdown in place while raising the debt limit and setting up negotiations with the president over spending cuts and other issues.
In other energy futures trading on Nymex:
Natural gas rose 2.7 cents to $3.75 per 1,000 cubic feet.
Wholesale gasoline dropped 1.6 cents to $2.682 a gallon.
Heating oil shed 2.9 cents to $3.041 a gallon