Oil above $90 as US spending cuts cause jitters

  • Article by: PAMELA SAMPSON
  • Associated Press
  • March 5, 2013 - 3:55 AM

BANGKOK - The price of oil rose slightly on Tuesday, a day after dropping below $90 a barrel for the first time this year.

Benchmark oil for April delivery was up 46 cents to $90.58 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. On Monday, the price fell as low as $89.33 per barrel before finishing on the Nymex at $90.12.

Monday's drop was attributed to the introduction in the U.S. of $85 billion in automatic government spending cuts, which could hurt the world's leading economy.

The spending cuts kicked in on Friday after President Barack Obama and Congress failed to meet a deadline for striking a deal to avert or soften the reductions. Negotiations on Sunday ended in a bitter impasse.

The oil market will be watching for signs that a deal to claw back the cuts might be in the works.

Brent crude, used to price many kinds of oil imported by U.S. refineries, rose 79 cents to $110.88 a barrel on the ICE Futures exchange in London.

In other energy futures trading on the Nymex:

_ Wholesale gasoline rose 1.1 cent to $3.109 a gallon.

_ Heating oil rose 1.3 cents to $2.932 a gallon.

_ Natural gas gained 5.2 cents to $3.575 per 1,000 cubic feet.

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