Oil ends lower as 'fiscal cliff' concerns grow
NEW YORK (AP) — Oil finished lower Thursday as doubts increased over political leaders' ability to strike a deal in budget negotiations.
Enthusiasm over the U.S. Federal Reserve's plan to boost the economy, announced Wednesday, was replaced by concerns that President Barack Obama and Republican leaders were as far apart as ever on reaching a budget deal before year's end. Without an agreement, significant tax increases and government spending cuts will automatically take effect.
That so-called "fiscal cliff" could pull the U.S. economy into recession, likely hurting demand for energy.
Benchmark crude lost 88 cents to end at $85.89 per barrel in New York.
Prices at the pump continued to decline. The average gas price across the U.S. dropped by more than a penny overnight $3.30 a gallon, the lowest point since July 3.
Brent crude, used to price international varieties of oil, finished down $1.56 at $106.46 a barrel on the ICE Futures exchange in London.
In other energy futures trading on New York Mercantile Exchange:
— Heating oil fell 2 cents to end at $2.94 a gallon.
— Natural gas lost 4 cents to finish at $3.35 per 1,000 cubic feet.
— Wholesale gasoline fell 4 cents to end at $2.60 a gallon.