Brent crude oil slid to $109.24 on Thursday morning, after touching $110 on Wednesday.
The lift on Wednesday was credited to the Fed's announcement that it would move forward with plans for more monetary stimulus. The news boosted global markets which in turn supported Brent prices.
However, the increase was short lived as the commodity slid in the early hours of Thursday morning while investors shifted their focus to the upcoming U.S. fiscal cliff. Democrats and Republicans have not reached an agreement about the nation's deficit, causing uncertainty within the number one oil consumer's markets.
Although President Barack Obama assured the public that a compromise could be reached before Christmas, many are expecting the talks to continue well past Christmas. If the two sides cannot agree before January 1st, the country could sink into a deep recession.
Wednesday's OPEC meeting concluded with ministers agreeing to keep the group's 30 million bpd target. The decision put pressure on Brent prices as many believe the demand in 2013 will drop. According to Reuters, the International Energy Agency has forecasted sluggish demand throughout 2013, as the world's top economies struggle to restore balance. OPEC members are set to meet again on May 31.
The possibility of an Iranian nuclear weapon has prompted sanction on top of sanction in an effort to stop funding the uranium enrichment program. The sanctions have tightened the supply coming from the Middle East, but Saudi Arabian companies have risen to the challenge and upped their oil production goals, keeping OPEC output balanced.
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