Crude down in Asia on US fiscal cliff deadlock

In this July 26, 2011, file photo, Austin Mitchell, left, and Ryan Lehto work on an oil derrick outside of Williston, North Dakota. Crude prices were down in Asia on Monday as traders’ hopes of a last-minute compromise deal between US politicians to avert the fiscal cliff faded, analysts said. AP PHOTO/GREGORY BULL

SINGAPORE—Crude prices were down in Asia on Monday as traders’ hopes of a last-minute compromise deal between US politicians to avert the fiscal cliff faded, analysts said.

New York’s main contract, light sweet crude for delivery in February, shed a cent to $90.79 a barrel in the afternoon and Brent North Sea crude for February slipped nine cents to $110.55.

Political deadlock preventing a bipartisan deal hours before the fiscal cliff is due to kick in was depressing markets, said Yang Weiming, premium client manager for IG Markets Singapore.

“All the news is talking about the stalemate on the fiscal cliff discussion… expectations are not so high on a grand resolution,” he told AFP.

US leaders were still locked in negotiations that appeared to be making little headway on a deal to avert the punishing package of government spending cuts and tax hikes that are due to take effect on January 1.

Senate Republican minority leader Mitch McConnell warned that, despite through-the-night talks, negotiators were still a long way from success, with Democrats not responding to a “good faith offer” his party had made.

Senate Democratic leader Harry Reid agreed talks were at a standstill, raising the prospect that Americans will ring in the New Year with no deal to avert the fiscal cliff which could send the US—the world’s largest economy and oil consumer—into recession.