By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Benchmark U.S. crude-oil futures retreated in electronic trading Monday as the failure of Washington lawmakers to reach agreement on the country’s debt-ceiling over the weekend stoked fears about energy demand.
Crude for September delivery CL1U -0.97% lost 89 cents, or 0.9%, to $98.98 a barrel on the New York Mercantile Exchange during Asian trading hours.
The loss snapped four days of gains for oil, as concerns over a lack of resolution in the U.S. debt-ceiling talks created uncertainty in the outlook for energy demand.
Negotiations between U.S. lawmakers wrapped up on Sunday in Washington without a clear path ahead to lift the debt-ceiling. The $14.3 trillion debt ceiling needs to be raised by Aug. 2 or the government would be at risk of defaulting on its obligations. Read more about U.S. debt negotiations.
“The U.S. remains a source of constant concern, and overall sovereign debt is likely to remain a major dampening force to the upside to prices over the rest of the quarter,” analysts at Barclays Capital said.
The fall for crude came despite a weaker dollar, which traded lower on the U.S. debt impasse.
The dollar index DXY -0.03% , which compares the U.S. unit to a basket of six other currencies, traded at 74.124, down from 74.196 in North American trade late Friday. Read more on currencies.
The greenback tends to trade inversely dollar-priced commodities such as crude, as it makes them cheaper to holders of other currencies.
Virginia Harrison is a MarketWatch reporter based in Sydney.
