Investing.com - Oil futures traded lower to start the week in Asia after U.S. lawmakers set off for the holidays with no fiscal cliff resolution close to being reached, giving traders pause about embracing riskier assets.
On the New York Mercantile Exchange, light, sweet crude futures for February delivery fell 0.12% to USD88.56 per barrel in Asian trading Monday. Crude traded as high as USD88.83 per barrel and as low as USD88.44.
The weakness for crude in Monday's Asian session follows a 1.35% drop during Friday's U.S. session. Even with that decline, West Texas Intermediate added 2.3% last week. Resistance appears to be the two-month high of USD90.53 a barrel set on Thursday.
As fiscal cliff worries permeated the early part of Asian trading Monday, crude was seen flirting with its lowest levels in a week. President Obama and U.S. lawmakers have left Capitol Hill to enjoy the Christmas holiday. President Obama is in Hawaii, but various press agencies have reported that the President remains in electronic contact with his Republican counterparts, giving some hope that a deal can be reached.
At this point, it appears that the White House is willing to accept a small deal to avert the tax increases from going into effect on January 1, 2013. However, the caveat is that the President wants the small deal to set the stage for broader budget talks in the new year.
Congress is expected to come back into session Thursday December 27, leaving policymakers little time in which to strike any deal to avert the fiscal cliff. The deadline is January 1, 2013. Should that deadline be missed, scores of previously enacted tax cuts will become tax increases.
The combination of higher taxes and lower government spending could trigger another recession, which would almost spark a sell-off in the oil pits because the U.S. is the world's largest oil consumer.
Elsewhere, Brent crude for February delivery traded on the ICE Futures Exchange slipped 0.28% to USD108.80.
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