Connect to share and comment
Oil prices eased in Asia Friday as revised fourth-quarter US economic growth disappointed, while dealers eyed huge federal spending cuts due to take effect, analysts said.
New York's main contract, light sweet crude for delivery in April, shed 12 cents to $91.93 a barrel in the afternoon and Brent North Sea crude for April delivery slid 33 cents to $111.05.
"Oil suffered from the lower-than-expected US fourth-quarter GDP," said Jason Hughes, head of premium client management for IG Markets Singapore.
Data Thursday showed growth in world's largest economy and oil consumer came in at 0.1 percent in October-December, better than the initial estimate of a 0.1 percent contraction but lower than expectations of 0.5 percent growth.
The slowdown reflected sharp falls in inventory building and federal government spending ahead of the January 1 "fiscal cliff" of tax hikes and huge spending cuts.
However, while the tax hikes were addressed, dealing with the spending issue was put back to March 1, and with no deal reached between lawmakers to put off the "sequester", those cuts are due to kick in later Friday.
The lack of action means federal programmes in every agency including the military will suffer reductions.
DBS Group Research stated in a report: "For the moment, it appears that the sequester is coming, growth forecasts need to be pared back." He added that the huge budget cuts "won't be good for the unemployment rate".