By JENNY GROSS CONNECT
Crude prices traded 1% lower Monday after Tropical Storm Karen receded and in response to the prolonged U.S. government shutdown.
The November contract on the New York Mercantile Exchange was down $1.05, or 1%, at $102.75 a barrel. The November Brent on London's ICE futures exchange was down $1.14, or 1%, at $108.32 a barrel.
The threat of a sustained U.S. government shutdown is unnerving market participants, leading some of them to dump risky assets such as oil. On Saturday, the House voted 407-0 to provide back pay to all furloughed federal workers once the shutdown ends, but neither party showed signs of relenting its position to end the shutdown.
"With every day that passes by it will become increasingly damaging and has the potential to reach a catastrophic stage where the global economy, companies and the average consumer could suffer to the extent not experienced in our life time," PVM said in a note to clients published Monday.
Tropical Storm Karen, which had looked set to land on the fringe of the U.S. Gulf Coast refining region, passed without any serious supply disruptions. Companies operating in the region are gradually restarting operations.
At least 42 people died in Egypt in clashes between police and supporters of President Mohammed Morsi near Ramses Square in Cairo Sunday.
The ICE's gasoil contract for October delivery was down $4.75, or 0.5%, at $917.75 a metric ton, while Nymex gasoline for November delivery was down 218 points, or 0.8%, at $2.5861 a gallon.
