MW: Oil futures fall as debt ceiling debate rages on
By Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures fell Tuesday, extending their declines from the prior session as pressure from continued wrangling over the U.S. debt ceiling failed to offset support from a weaker dollar and upbeat data on consumer confidence.
Crude for September delivery CL1U -1.04% fell $1.02, or 1%, to $98.17 a barrel on the New York Mercantile Exchange after touching a low of $97.82.
The Conference Board reported Tuesday that consumer confidence rose to 59.5 in July from a downwardly revised 57.6 in June, helping oil prices pare some of their earlier losses. Oil was trading below $98 ahead of the consumer confidence data.
Also midmorning, the Commerce Department said sales of new single-family homes fell 1% in June to an annual rate of 312,000, falling short of economists’ forecasts for an increase to 325,000.
A failure to reach an agreement to raise the U.S. debt ceiling could cause a selloff in oil prices, said Darin Newsom, a senior analyst at Telvent DTN.
Late Monday, President Barack Obama and House Speaker John Boehner touted rival plans to cut the U.S. deficit and lift the debt ceiling in back-to-back television appearances. Read more about the rival plans.
Even when a deal is finally reached, that may boost the dollar, Newsom said. A stronger dollar tends to also put pressure on dollar-denominated oil prices.
The dollar index DXY -0.53% , which tracks the U.S. unit’s performance against a basket of six other currencies, slipped to 73.723, down from 74.074 late Monday. Read more about currencies action.
Other energy futures followed oil lower. August heating oil HO1Q -0.81% fell 2.6 cents to $3.08 a gallon and August gasoline RB1Q -0.70% lost 2.3 cents to $3.10 a gallon.
August natural gas NG11Q -1.07% was trading 6.1 cents lower at $4.325 per million British thermal units.
