BANGKOK— The price of oil fell Monday after political leaders in Washington failed to stave off automatic cuts in government spending that could hurt the U.S. economy.
Benchmark oil for April delivery was down 34 cents to $90.34 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $1.37 to close at $90.68 a barrel on the Nymex on Friday, its lowest close this year.
Automatic government spending cuts of roughly $85 billion kicked in on Friday after President Barack Obama and Congress failed to meet a deadline for striking a deal to avert or soften the reductions. Negotiations on Sunday ended in a bitter impasse, and what happens next is anyone’s guess.
The International Monetary Fund has predicted that the spending cuts could reduce U.S. growth by some 0.5 percentage point in 2013.
The current budget crisis comes just two months after tense year-end negotiations yielded a New Year’s Day deal keeping the U.S. government from plunging over a “fiscal cliff” of huge spending cuts and tax increases.
Read More at OfficialWire . By Pamela Sampson.
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