Brent crude oil remains under pressure as the US ‘fiscal cliff' talks continue to create uncertainty in the market. The commodity slipped under $109 on Friday morning, trading at 108.37.
The slide was mostly caused by Republican Speaker of the House John Boehner's harsh comments about his ongoing negotiations with the White House. President Barack Obama has proposed a revised fiscal plan to lower the country's deficit and avoid the bundle of tax increases and spending cuts set to kick in on January 1. However, Boehner refused to compromise with those terms, and the two political parties remained at a stalemate.
Worries about the fiscal cliff coupled with slow economic growth in China and a European financial crisis have kept Brent prices below $110 recently. Most are expecting 2013 to bring prices down as the global supply exceeds demand.
Demand worries are underpinned by supply interruption concerns as the Middle East continues to be a powder keg waiting for a spark. Violence in Syria has lent support to Brent prices this year as a civil war stretched across its borders and pulled some of its neighbors, like Turkey, into the fighting.
Iran has also added to the region's tension as the West attempts to cut off a nuclear development program that many fear will provide the country with nuclear bombs. Despite heavy sanctions on the country's oil, Iranian officials have shown no signs of slowing the program.
Forbes, reported that this push and pull of supply and demand will probably keep Brent near an average of $110 in 2013. The waning demand will pressure prices, but with the current instability in the Middle East, most are expecting that supply worries will be key in balancing Brent prices in 2013.
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