Oil prices drift lower in quiet holiday trading; US gasoline price edges up

NEW YORK, N.Y. – The price of oil fell slightly Monday during a shortened pre-Christmas trading day.

Concerns over the political stalemate in Washington continue to be the focus of traders, with the price of benchmark West Texas Intermediate crude closing down five cents at US$88.61 a barrel on the New York Mercantile Exchange.

Brent crude, used to price international varieties of oil, fell 17 cents to US$108.80 a barrel.

Energy traders have been watching Democrats and Republicans clash over tax hikes and social services cuts. Normally, recent good economic data would signal more energy consumption and higher prices. But fears about the “fiscal cliff” have so far tempered prices, according to Phil Flynn of The Price Future Group.

“Because of the holiday, a lot of people are sitting on the sidelines,” Flynn said. “We’ve priced in those scenarios and now we’re just waiting for something definitive.”

In other energy futures trading on the Nymex, natural gas fell 10.5 cents to US$3.346 per 1,000 cubic feet; heating oil eased two cents to US$3 a U.S. gallon (3.79 litres) and wholesale gasoline rose 1.6 cents to US$2.75 a gallon.