SINGAPORE: Oil prices fell below $97 a barrel today in Asia as US leaders failed to agree to lift the government debt limit just days from a deadline, leaving investors to mull worst-case scenarios if a default occurs, an AP report said.
Benchmark oil for September delivery was down 62 cents to $96.82 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose 4 cents to settle at $97.44 on Thursday.
In London, Brent crude rose 10 cents to $117.46 per barrel on the ICE Futures exchange.
Investors are closely watching negotiations among U.S. lawmakers ahead of Aug 2, when the government will run out of money to pay its obligations unless its $14.3 trillion debt limit is raised.
Investors will also be eyeing US GDP growth for the second quarter which is scheduled to be announced later today.
Some analysts expect that once the US debt issue is settled, investors will focus on strong crude demand in developing countries, particularly China, and push oil prices higher by the end of the year.
In other Nymex trading in September contracts, heating oil fell 1.3 cents to $3.10 a gallon while gasoline skidded 0.4 cents to $3.06 a gallon. Natural gas futures dropped 3.6 cents to $4.21 per 1,000 cubic feet.