Crude oil logs third weekly loss in a row

The price of crude continues to be driven lower by headlines, with worries over Syria lessening and budget wrangles in Washington both helping to push the commodity downward.

Crude oil futures for November settled down 0.15%, falling below $103 a barrel, meaning the contract has made three weekly declines in a row.

With the United Nations Security Council on the cusp of voting on a resolution to deal with President Bashar al-Assad’s chemical weapons – a resolution that does not include the threat of automatic military action against Syria – the Syrian crisis is effectively off the table as a reason for any risk premium to be factored into the price of oil.

Prices rose coming into this month because of fears that a US strike could precipitate disruption of oil supplies from the Middle East, which accounts for more than a third of the global output of oil.

Taking its place in the concerns of market participants is the impasse in Washington with regard to sorting out a budget for the next fiscal year. If Congress is not able to agree on a deal before 1 October, federal employees may be put on unpaid temporary leave and pay for military personnel could be delayed.

That would be a big drag on consumer spending, and by extension, the economy as a whole. Consequently the looming shutdown is stifling risk demand across the board, including demand for oil.

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