By Michael Kitchen, MarketWatch NEW YORK (MarketWatch) — Oil futures traded marginally lower on Monday, with trading quiet ahead of the Christmas holiday. Crude oil for February delivery CLG3 -0.17% slipped 21 cents, or 0.2%, to $88.45 a barrel in electronic trading, adding to a 1.6% drop in Friday’s regular New York Mercantile Exchange session. Trading in energy products will close at 1:30 p.m. Eastern time on Monday ahead of the Christmas holiday on Tuesday. Friday’s losses for oil futures came after a botched attempt by House Republicans to pass a “Plan B� bill for averting fiscal-cliff tax hikes. The failed effort appeared to lower the prospects for a bipartisan deal to protect the U.S. economy from the austerity measures slated to take effect at the start of the year. Read: Oil drops below $89, but notches weekly win On Saturday, the top Republican negotiator on the fiscal cliff, House Speaker John Boehner, said he’s ready to return to talks with the White House. Read: Boehner holds out hope for fiscal cliff deal However, the markets seemed to take little cheer from the current situation on the fiscal cliff, as U.S. stock futures traded lower. Subject of discussion The fiscal cliff has become a central focus for investors in a wide variety of assets, including oil futures, and Citi Futures analysts wrote Friday that any solution to the cliff is unlikely to affect the actual supply-and-demand dynamics in the U.S. energy market. “We don’t think a fiscal deal would put physical petroleum demand on a much different path, [and] the price reaction has far more to do with investor appetite for risk than actual oil consumption in our view,� they wrote. Natural-gas futures also moved lower, as January natural gas NGF13 -2.78% dropped 9 cents, or 2.6%, to $3.36 per million British thermal units. January gasoline RBF3 -0.51% fell 2 cents to $2.72 a gallon and January heating oil HOF3 -0.23% dropped 1 cent to $3.01 a gallon. Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.

Source