Crude Oil Futures on Track for Weekly Gain on U.S. Economic Recovery
Crude Oil Futures on Track for Weekly Gain on U.S. Economic Recovery Reuters

Crude oil prices declined during the Asian trading hours Monday as concerns about the fiscal cliff negotiations continued to weigh on the sentiment.

Light sweet crude for February delivery declined 0.17 percent or 15 cents to $88.51 a barrel in electronic trading on the New York Mercantile Exchange during the Asian trading hours. Brent crude oil futures for the February delivery fell 0.27 percent or 29 cents to $108.68 a barrel on the ICE futures exchange in London.

Traders’ confidence was weighed down by lack of hopes on the U.S. avoiding the fiscal cliff. Lawmakers in Washington have only one week left to strike a budget deal, which will avert the $600 billion spending cuts and tax hikes that threaten to push the world’s largest oil consuming nation into a recession early next year.

Market sentiment turned negative last week after the Republican lawmakers called off a vote on an alternative plan -- Plan B -- designed to help avert the fiscal cliff citing lack of support. House Speaker John Boehner has been working to gain support for his Plan B, which would allow tax rates to rise on households earning more than $1 million.

“It's all about the U.S. fiscal cliff issue. The chances are that we will get a deal between the White House and the Republicans, but the fact that Boehner failed to get members to support his plan is worrying,” Victor Shum, managing director at IHS Purvin & Gertz, told Reuters.

Investors are also concerned that even if the U.S. President Barack Obama and the House Speaker John Boehner are able to reach an agreement, there is no guarantee that it will be able to secure the required number of votes in the House and the Senate.

On Friday, light sweet crude for the February delivery declined 1.6 percent or $1.47 and settled at $88.66 a barrel on the New York Mercantile Exchange while Brent crude for February delivery fell $1.23 and settled at $108.97 a barrel.