NEW YORK (AP) — The price of oil nearly fell below $100 a barrel for the first time in more than three months Thursday as relief faded over a U.S. deal to avoid a default on its debts.
Benchmark crude for November delivery slid as low as $100.03 before recovering a bit to close with a loss of $1.62, or 1.6 percent, to $100.67 a barrel on the New York Mercantile Exchange. Oil last traded below $100 a barrel on July 3.
Oil gained more than $1 a day earlier, driven by optimism over the eleventh-hour deal reached by leaders in Congress to reopen the government through Jan. 15 and increase the nation's borrowing authority through Feb. 7. The rally lost momentum, however, as investors assessed the impact of the 16-day partial shutdown of the government on the economy and worried that the deal only postpones the debt problem.
"More important for oil markets, S&P estimates that the closure of the government will result in a 0.6% reduction in Q4 GDP growth," wrote Addison Armstrong, senior director of market research at Tradition Energy, in a note to clients.
Also helping to push prices lower, meanwhile, was the improvement in negotiations on Iran's nuclear program between the Islamic Republic and six world powers. The two sides agreed to meet again in Geneva in early November.
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