The price of oil climbed to near US$104 a barrel Tuesday as the imminent start of the third-quarter U.S. corporate reporting season provided investors with something to focus on other just the budget stalemate in Washington.
By early afternoon in Europe, benchmark West Texas Intermediate crude for November delivery was up 84 cents at $103.87 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 81 cents to close at US$103.03 a barrel on the Nymex on Monday.
Oil prices have fallen in the last week after the U.S. government was forced to partially halt operations. The shutdown occurred because Congress could not agree on short-term funding that would have allowed the country to pay its bills past Sept. 30, the end of the fiscal year. Some 800,000 federal workers were furloughed, although some were called back to their jobs, and many non-essential agencies and services were shuttered.
A deadline is also approaching for raising the nation's borrowing limit. If Congress doesn't raise the limit by Oct. 17, the country could face its first-ever debt default, which experts warn could seriously harm the global economy.
Oil traders have gotten jittery in recent days as the deadline approaches, and crude prices have fallen.
Over the coming days, investors will be monitoring earnings statements from leading U.S. companies.
As is usual, aluminum giant Alcoa kicks off the quarterly earnings season later after Wall Street closes. While Alcoa is no longer listed on the Dow, it is considered a bellwether for commodities. Its results will be watched for signs about global manufacturers' demand for the lightweight metal in a stubbornly slow-growing economy.
New information on U.S. stockpiles of crude and refined products are also on the agenda.
Data for the week ended Oct. 4 is expected to show builds of 2.2 million barrels in crude oil stocks and 1.3 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the U.S. Energy Department's Energy Information Administration — the market benchmark — will be out on Wednesday.
Brent, the benchmark for international crudes, was up 75 cents to US$109.43 on the ICE Futures exchange in London.
In other energy futures trading on Nymex, wholesale gasoline rose 2.76 cents to US$2.6537 a U.S. gallon (3.79 litres), heating oil added 2.53 cents to US$3.0346 a gallon and natural gas rose 2.9 cents to US$3.658 per 1,000 cubic feet.