Brent steady above US$110 as US debt impasse ends

BRENT futures were steady above US$110 a barrel yesterday, with investors reluctant to lock in fresh positions ahead of a deluge of data expected in the wake of Washington’s deal to end a partial government shutdown. With federal workers returning to work, oil investors are awaiting delayed economic indicators to gauge the outlook for US demand.

BRENT futures were steady above US$110 a barrel yesterday, with investors reluctant to lock in fresh positions ahead of a deluge of data expected in the wake of Washington’s deal to end a partial government shutdown. With federal workers returning to work, oil investors are awaiting delayed economic indicators to gauge the outlook for US demand.

While Asian shares, the dollar and most other markets cheered the eleventh hour US deal, progress on talks over Iran’s nuclear programme capped gains in crude futures. Brent crude was unchanged at US$110,59 a barrel at 04H24 GMT. The November contract, which expired overnight ended 90 cents higher, while the December contract settled up US$1,17. US. oil fell seven cents to US$102,22 yesterday after ending US$1,08 higher.

“With US Congress postponing the deadline and talks between Iran and Western countries progressing in a very, very positive atmosphere, oil prices could go lower going forward,” said Yusuke Seta, a commodity sales manager at Newedge in Tokyo.

“A clear direction for the market will emerge once we start to see the US data delayed due to the shutdown.”

Capping weeks of political brinkmanship that had unnerved global markets, the Senate and House of Representatives each passed the spending measure. President Barack Obama was expected to sign the bill imminently. But the deal offers only a temporary fix, funding the government until 15 January and raising the debt ceiling until 7 February. Until clear market direction emerges, oil futures will trade in a narrow range, with Brent swinging between US$108,50 and US$113 a barrel, Newedge’s Seta said. If Brent breaks below US$108,50, its next support is at US$107,50, he added.

Investors are now focusing on the outcome of talks between Iran and the world powers over Tehran’s nuclear programme.

The United States described two days of negotiations as the most serious and candid to date after Western diplomats said Iran hinted it was ready to scale back sensitive atomic activities to secure urgent sanctions relief.

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