Global oil prices fell on Tuesday as a raft of downbeat company news and economic data sparked fresh concern about the strength of future energy demand, adding to fears over the US debt ceiling, dealers said.
In late afternoon London deals, Brent North Sea crude for delivery in February declined 82 cents to $111.06 a barrel.
New York's main contract, light sweet crude for February or West Texas Intermediate (WTI), reversed 30 cents to $93.84 per barrel.
"Crude oil fell today as disappointing corporate news and mixed economic pointers spooked concerns about demand," said analyst Fawad Razaqzada at trading firm GFT Markets.
"Germany suffered a double whammy as the latest data revealed GDP in Europe's powerhouse contracted 0.5 percent in the final quarter of last year while one of the country's biggest technology companies, SAP, reported results that missed analysts' expectations.
"We did see a better-than-expected rise in US retail sales for December, although at the rate of 0.5 percent, it is nothing to get excited over."
Sentiment was dampened by news that the the German economy, Europe's biggest, notched up its weakest growth in four years in 2012, as it increasingly feels an impact from the eurozone debt crisis.
German gross domestic product (GDP) shrank by about 0.5 percent in the fourth quarter of last year, bringing full-year growth to just 0.7 percent, the federal statistics office Destatis calculated in preliminary data.
In 2010 and 2011, the German economy had expanded by 4.2 percent and 3.0 percent respectively.
The market also took a knock after US President Barack Obama warned Republicans over the debt ceiling, with traders bracing for more US partisan bickering in the coming weeks.
"Crude oil prices have been in a consolidation mode ... as the lack of the agreement over the US debt ceiling and further build in the US oil crude stocks weighed further on market sentiment," added Sucden analyst Myrto Sokou.
President Barack Obama on Monday warned Republicans against using the debt ceiling as a "bargaining chip," saying a failure to raise it would sow financial chaos and send markets into a tailspin.
"To even entertain the idea of this happening, of the United States of America not paying its bills -- it is irresponsible, it is absurd," Obama said, repeating his demand for a rise in the nation's borrowing limit.
"We are not a deadbeat nation," the president said in the final press conference of his first White House term.
"While I'm willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they've already racked up."
Republicans reacted swiftly, essentially ignoring Obama's demand to de-couple the spending debate from the debt ceiling and giving every indication that the face-off will continue.
Congressional refusal to raise the debt limit beyond its current level of $16.4 trillion could delay key government payments in the world's largest economy and oil consumer, sending markets "haywire", Obama warned.
The United States ran up against its current debt limit at the end of 2012, but the government is using "extraordinary measures" to extend the limit until late February.
AFP
Tue Jan 15 2013
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