REFILE-UPDATE 6-U.S. oil slightly higher on hopes of U.S. budget resolution
(Fixes syntax in first paragraph, no other changes)
* China's crude imports hit record high
* Investors eye Iran nuclear talks
* Coming up: Chinese GDP data on Friday
* EIA will not publish U.S. oil inventory data this week
By Jeanine Prezioso
NEW YORK, Oct 14 (Reuters) - U.S. oil prices were higher on Monday as traders covered short positions in the event that U.S. politicians reach a deal to fund the government after being unable to come to terms on such funding in the last two weeks, traders said.
The U.S. Senate leader said he hopes to have a fiscal plan ready to show President Obama at 3 p.m. EDT (1900 GMT) on Monday after weekend talks showed some signs of progress.
"We're trading back and forth on the changing perceptions of what is happening in D.C. at this point," said Gene McGillian, oil analyst with Tradition Energy in Stamford, Connecticut. "You saw some short covering on the latest news that the Senate will have a plan. Nobody wants to be exposed if something should change."
Brent crude futures were trading 44 cents lower at $110.84 a barrel at 12:49 p.m. EDT (1649 GMT), after trading as low as $109.87. U.S. oil was trading 39 cents higher at $102.41 a barrel, after trading down to $101.06.
The budget fight that led to a partial shutdown of the government was expected to damage the global economy and dent oil demand in the United States, the world's largest oil consumer. International Monetary Fund chief Christine Lagarde warned of "massive disruption" to the global economy if the U.S. debt ceiling, which will be reached on Thursday, was not lifted.
"Not only is the U.S. standoff doing harm to the U.S. economy but the knock on effect is it will do harm to the global economy," said Stephen Schork, editor of the Schork Report in Villanova, Pennsylvania.
The spread between global benchmark Brent and U.S. oil benchmark West Texas Intermediate has widened in the past two weeks as the U.S. budget crisis has weighed more heavily on its domestic contract than on Brent. Brent's premium over West Texas Intermediate CL-LCO1=R was last trading at $8.48 per barrel, after widening to its most since early June in the previous session at $10.01.
Brent oil prices were also lower as geopolitical tensions with Iran are expected to ease. Talks about Iran's nuclear program are due to start in Geneva on Tuesday and will be the first since the election of President Hassan Rouhani, who has tried to improve ties with the West to pave the way for an end to sanctions, which have cut Iraian oil exports by more than one million barrels per day.
Ten U.S. senators said they were open to suspending the implementation of new sanctions on Iran but only if Tehran takes significant steps to slow its nuclear program.
As well, an unexpected decline in Chinese exports in September also weighed on Brent. Exports fell an annual 0.3 percent in September versus market forecasts for a rise of 6 percent, reflecting weak global demand and going against a recent slew of data that pointed to a stabilising Chinese economy.
China is the world's second largest oil consumer.
Nevertheless, data over the weekend showed China's crude oil imports rebounded in September to a record high of 6.25 million bpd, up 28 percent on the year and topping the previous record of 6.15 million bpd in July.
Chinese GDP data will be released on Friday.
The U.S. Energy Information Administration will not publish its weekly oil inventory data this week for the first time since 1979 due to a lack of government funding. (Additional reporting by Lin Noueihed and Jacob Gronholt-Pedersen; Editing by William Hardy and Bob Burgdorfer)
- Pennsylvania newlyweds "just wanted to murder someone together:" police
- WTO overcomes last minute hitch to reach its first global trade deal
- North Korea frees U.S. Korean War veteran after seven weeks |
- Ice storm causes blackouts, delays in Texas, Arkansas
- Colorado baker discriminated by denying gay couple wedding cake: judge