Oil prices rise toward US$104 as Obama cancels state visit to Asia

By Pamela Sampson, AP

BANGKOK–The price of oil rose Friday as President Barack Obama’s cancellation of his Asia trip indicated negotiations are intensifying in Washington to end a budget impasse that threatens to damage the economy.

Benchmark oil for November delivery was up 25 cents to US$103.56 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell 79 cents to close at US$103.31 on Thursday.

The shutdown entered its fourth day Friday with no end in sight. However, a prolonged halt to government activities would reduce demand for energy and result in lower prices of fuels such as gasoline. That would be a boon for drivers but also signal a weak economy.

U.S. crude prices have traded at their lowest levels in nearly two weeks as the U.S. government “shutdown fuels concerns of slowing economic growth,” said Alex Young of CMC Markets in an email commentary.

Brent, the benchmark for international crudes, rose 22 cents to US$109.22 in London.

In other energy futures trading on Nymex: — Wholesale gasoline fell 0.3 cent to US$2.637 per gallon. — Natural gas rose 1.4 cents to US$3.513 per 1,000 cubic feet. — Heating oil rose 0.9 cent to US$3.012 per gallon.