Brent crude oil fell below $112 on Friday morning. The commodity traded at $111.42 on Friday, which reflected the uncertainty in the market as investors geared up for another battle in Washington over the U.S. budget.
After a boost when the fiscal cliff was averted in the U.S., Brent prices have leveled off. Now, the commodity is being tugged by speculation that the U.S. debt ceiling debates will be long and drawn out. Republican lawmakers, angered by the fiscal cliff deal's lack of focus on the budget, are expected to fight hard for steep spending cuts in order to tackle the country's deficit.
Brent is also weighed down by the Fed's December meeting minutes, released on Thursday. According to Reuters, the minutes showed that some officials at the December meeting are becoming increasingly concerned about the Fed's current program to buy bonds and boost the economy over the coming months.
Some officials even commented that they would like to stop or slow the program before the end of 2013. The asset buying program has supported investor risk appetite, and the release of the minutes caused investors to pull back.
Later on Friday, U.S. job data will be released and could help lift Brent prices. The data is expected to add to evidence that the U.S. economy is picking up and heading for recovery. The government is also expected to release non-farm payroll data. The data is an important indicator of strength, and positive numbers would indicate the U.S. economy finished 2012 with underlying strength.
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