Crude oil prices were lower in afternoon trade in New York Monday as bad news on US manufacturing caused concerns about demand and as investors worried that a new deal on the US debt ceiling might not have to votes to gain passage.
September contracts for West Texas Intermediate crude was down 91 cents to $94.79 per barrel at nearly 2 p.m. on the New York Mercantile Exchange, while Brent crude was 21 cents lower to $116.55 per barrel in the most recent report from the ICE Futures Europe in London.
Despite the announcement Sunday night in the US that legislative leaders had reached a deal to raise the debt ceiling, there was no certainty among investors that the bill resulting from the agreement would pass votes in the House of Representatives or the in the Senate.
If the deal is not approved, analysts estimate that the US will have enough cash to pay its bills for about a week before having to decide which bills to pay and which bills to let go and default on.
In addition, the Institute for Supply Management reported that its US factory index was down to 50.9 in July to its lowest level in two years, from 55.3 in June and against expectations that the index would drop, but only to 54.5.
The reading edged close to 50, with any reading over that level indicating that factory activity is expanding, but a reading below that level showing that activity is in contraction.
The July reading raised fears that oil demand will decline further.
Nymex September gasoline futures were down 2 cents to $3.04 per gallon in afternoon trade, while September heating oil futures dropped less than a cent to $3.10 per gallon but September natural gas futures added 4 cents to $4.18 per million British thermal units.
The retail price of a gallon of gasoline in the US was slightly lower overnight, with drivers now paying a national average of $3.705 per gallon for regular unleaded.
