Brent holds above $110 as US fiscal cliff deadline draws near
Democrats and Republicans remained at loggerheads on Sunday over a deal that would prevent the United States from tumbling over a "fiscal cliff" of sharp spending cuts and higher taxes for all Americans.
While analysts are optimistic there will be a breakthrough in the talks, the lack of a deal with the deadline just hours away kept a ceiling on prices of riskier assets.
Brent crude edged down 7 cents to $110.55 a barrel by 0457 GMT after hitting a low of $110.08 earlier in the session. U.S. crude inched up 2 cents at $90.82.
Brent is headed for a fourth straight yearly gain and set to log a record high annual average settlement price, while U.S. crude was on track for a drop this year after three consecutive annual gains.
"The negative consequences of the fiscal cliff appear to be too large to ignore, and overtures from both political parties have been increasing," Jason Schenker, president of U.S. consultancy Prestige Economics, said in a note to clients. "Significant market moves are likely when the deal gets done – or if no deal is done before the year end.... In any case, neither outcome is fully priced in."
Jonathan Barratt, chief executive officer at Barratt's Bulletin, a Sydney-based research firm,
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