UPDATE 4-Oil slips below $110 as U.S. fiscal talks stall
(Updates throughout, changes dateline, previous SINGAPORE)
* U.S. Republicans withdraw support for budget agreement
* Coming Up: U.S. durable goods orders, weekly; 1330 GMT
LONDON, Dec 21 (Reuters) - Brent crude oil fell below $110 a barrel on Friday after talks in the United States to avert a budget crisis stalled, reviving worries about demand i n the world's biggest oil consumer.
Republican lawmakers failed to back an effort to head off $600 billion worth of tax rises and across-the-board spending cuts that could push the U.S. economy into recession next year.
The move depressed stock markets, the euro and commodities but boosted the dollar.
Brent crude slipped 75 cents to $109.45 per barrel by 0930 GMT. Brent was on track for a second weekly rise and was up just under 2 percent for 2012 as a whole, having averaged around $111.70, not far above its 2011 average of $110.91.
The U.S. budget stalemate had a larger impact on U.S. crude , which dropped to a low of $88.93 and was trading down $1.05 at $89.08 by 0930.
"The latest news that came out just a few hours ago has caused the broader markets to sell," said Victor Shum, managing director at IHS Purvin & Gertz, referring to U.S. House of Representatives Speaker John Boehner's failure to round up Republican support for his bill.
"There's a view that it's a setback for talks between the Republicans and the White House."
Only 11 days are left to prevent automatic tax hikes and spending cuts, referred to as the 'fiscal cliff'.
Analysts are more upbeat on the prospects for the oil market in the New Year, following Chinese data showing higher demand and on expectations of slightly faster global economic growth.
World oil demand growth looks set to rise in 2013 due to a recovery in the U.S. economy, according to many forecasters.
The U.S. economy grew faster than previously thought, at a 3.1 percent annual rate in the third quarter, the Commerce Department said. It was the fastest pace since late 2011 and more than double the second quarter's 1.3 percent rate.
Other data showed factory activity in the U.S. mid-Atlantic region picked up this month, while home resales in November were the best in three years, indicating the economy retained some vigour early in the fourth quarter.
"The numbers provide a sound spring board for an improved growth outlook for the United States in 2013," said Ric Spooner, chief market analyst at CMC Markets. (Additional reporting by Florence Tan and Manash Goswami in Singapore; editing by William Hardy)
- Somali officials say U.S. struck where al Shabaab were meeting
- Marilyn Monroe sex film to be kept private |
- Ukraine accuses Russia of 'undisguised aggression' as rebels advance |
- Actress Jennifer Lawrence contacts authorities after nude photos hacked
- Risk appetite flickers in Europe, ECB speculation holds down euro