Oil prices fall as US 'fiscal cliff' approaches
Oil prices fell Monday, just eight days before the U.S. arrives at the "fiscal cliff" deadline without a budget agreement in place.
If no deal is reached by Jan. 1, steep tax increases and government spending cuts will automatically take effect that will jar the U.S. economy and potentially throw it into recession, economists have warned.
Benchmark oil for February delivery fell 14 cents to $88.52 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $1.47 Friday to finish at $88.66 per barrel in New York, the contract's lowest point in three weeks. It dropped to $87.96 per barrel at one point Friday.
Oil prices tend to drop when a major world economy is threatened by a downturn, which more often than not leads to reduced demand for energy.
(Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.)