New York's main contract, West Texas Intermediate (WTI) for delivery in November, fell 41 cents to USD 103.69 in mid-morning trade, while Brent North Sea crude for November eased 27 cents to USD 108.92.
    
WTI jumped USD 2.06 in New York trade on Wednesday. News about the near completion of a key US Gulf Coast pipeline, but the upbeat sentiment over increased supply was short-lived.

Brent raised USD 1.25 in London trade. "Markets are closely following developments in the US as the federal government shutdown enters its third day. A continuation of shutdown will dampen prices," said Sanjeev Gupta, the head of the Asia-Pacific Oil and Gas practice at consultancy firm EY.
    
Talks between an exasperated President Barack Obama and top Republicans yesterday failed break the impasse, with both sides accusing the other of refusing to negotiate.
    
The breakdown ensures the world's largest economy heads into a third day of a government spending freeze on Thursday, raising fears that the gridlock will continue into the middle of the month and trigger a catastrophic debt default.
    
Joyce Liu, investment analyst at Phillip Futures in Singapore, said investor gloom over the increasing likelihood of an extended US government shutdown was exacerbated by a lacklustre US jobs report.
    
Payrolls firm ADP on Wednesday said the US private sector added 166,000 jobs in September, below what analysts had expected and too low to meaningfully reduce the jobless rate.
    
"The worse-than-expectations increase in ADP employment, together with the about 800,000 furlough due to government shutdown, do not paint an optimistic future for the US labour market," Liu said.
    
Prices were also pressured after the US Department of Energy reported that supplies increased by 5.5 million barrels last week, far higher than expectations of a 2.1 million barrel rise, indicating weaker demand.

(Agencies)

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