Brent crude slips as US stocks rise
Brent crude slipped toward $109 a barrel this morning, on rising oil stockpiles and weaker fuel demand in the United States, while fears that the world's largest economy might miss a deadline for next year's budget kept bulls in check.
Deadlocked talks to avert a "fiscal cliff" of steep tax hikes and budget cuts in the United States returned to investors' focus after announcements by the US Federal Reserve of more monetary stimulus buoyed global markets.
Sharp differences on the 2013 budget persisted between Congressional Republicans and the White House on Wednesday, when negotiators warned the showdown could drag on past Christmas.
Brent crude fell in the first of four sessions and was down 30 cents to $109.20 a barrel by 07.25 GMT while US crude was at $86.48, down 29 cents. The January Brent contract expires on Friday.
"The fiscal cliff continues to be a concern and we've got negative data out of the United States in terms of oil inventories," said Natalie Rampono, a commodities analyst at ANZ in Melbourne.
US crude inventories rose last week against expectations of a fall while gasoline and distillates stockpiles jumped more than expected. The jump in fuel stocks came despite a pull-back in refinery output and steady import levels.
"Supply is still very high in the United States and the high distillates stocks indicates demand is pretty weak, although it should be strong at this time of the year," Ms Rampono said.
Demand will be sluggish through 2013 as economic expansion stays tepid and crude supply levels comfortable, which could ease price pressure on consumers, the International Energy Agency said.
Global oil demand would grow 865,000 barrels per day in 2013 to hit 90.5 million bpd, the IEA said.