Crude prices fall on fears of fiscal showdown fallout

Investing.com - Oil prices fell on Thursday over fears the recent fiscal shutdown that closed the government and threatened to throw the country into default will dampen recovery and crimp demand for fuel and energy.

Bearish industry supply data fueled the selloff as well.

On the New York Mercantile Exchange, light sweet crude futures for delivery in November traded at USD100.70 a barrel during U.S. trading, down 1.55%.

The commodity hit a session low of USD100.06 and a high of USD102.31. The November contract settled up 1.07% at USD102.29 a barrel on Wednesday.

Oil futures were likely to find support at USD96.08 a barrel, the low from July 1, and resistance at USD102.95 a barrel, Wednesday's high.

The U.S. Congress passed a bill to reopen the government and raise the debt ceiling on Wednesday, just hours ahead of a deadline that would have opened the doors to possible sovereign debt defaults.

The deal will fund the government until Jan. 15 and raise the government borrowing limit until Feb. 7.

Still, fears the shutdown has eroded confidence to the point that the economy will slow and demand less fuel and energy sparked a selloff in oil markets.

Oil prices also remained under pressure after a report by the American Petroleum Institute on Wednesday showed that U.S. crude stockpiles rose by 5.9 million barrels in the week to October 11, more than double forecasts for a build of 2.25 million barrels.

Elsewhere, oil traders continued to monitor talks over Iran's nuclear program between Western diplomats and Tehran, amid speculation that sanctions on Iranian oil exports may be eased and boost global supply.

Western-led sanctions on Tehran have cut Iranian oil exports by more than 1 million barrels per day.

Meanwhile on the ICE Futures Exchange, Brent oil futures for November delivery were down 1.29% at USD109.17 a barrel, up USD8.47 from its U.S. counterpart.

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