WTI crude oil prices dropped during the early hours of the European trading sessions on Friday, as discussions continued in the US to finalize a solution before the debt limit deadline. The WTI dropped to 1% lower.
WTI crude oil was seen trading 1.23% lower at $101.74 a barrel at the time of writing, while the European benchmark Brent crude edged 0.64% lower to $111.08 at the same time.
The crude oil stockpiles rose by 6.8 million barrels in the week ended October 4th, according to reports from the Energy Information Administration.
The US president Barack Obama met up with the Republicans on Thursday, where President Obama rejected a proposal from the party for a short-term debit ceiling plan. However he hinted his keenness to discuss a solution to end the government shutdown with congressional Republicans.
The world’s largest economy has entered its eleventh day of the partial shutdown, after Democrats and Republicans in Congress failed to finalize an agreement for the country’s government funding. The partial shutdown has left approximately 800,000 federal employees without pay and work, while federal institutions remain closed.
The shutdown could cost the US government almost $300 million a day, which would affect the economy and markets.
The standoff has marred the markets as questions were raised as to whether the Congress would raise the $16.7 trillion debt ceiling.
“In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth – with many private-sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression,” the report from the US treasury stated.
Democrats and Republicans in the congress are expected to finalize a way out before October 17, the day the US treasury is expected to end its borrowing limit.
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