An oil and gas drilling platform stands offshore as waves churned from Tropical Storm
Karen come ashore in Dauphin Island, Alabama, US (Reuters).
US benchmark crude oil futures witnessed choppy trade as the threat over a US government default weighed heavily on economic growth and oil demand in the world's leading economy.
The West Texas Intermediate (WTI) futures rose and fell 0.3% in New York on 9 October.
WTI for delivery in November gained about 26 cents to $103.75 per barrel in electronic trading on the New York Mercantile Exchange and traded at $103.32 as of 9:49 am London time.
The volume of all futures traded was some 43% below the 100-day average.
The November Brent crude contract fell 15 cents to $110.01 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark was at a premium of $6.70 to WTI, as against $6.67 on 8 October.
The US is the world's largest consumer of oil and market players are concerned about the strength of future oil demand in America. The country is expected to account for 21% of global oil consumption in 2013, according to the International Energy Agency.
The Energy Information Administration is likely to put out its weekly supply report on 9 October, regardless of the government shutdown. The report could reveal that supplies rose by 1.6 million barrels, according to a Bloomberg survey.
Earlier, on 8 October, the American Petroleum Institute, an industry group, said that US crude inventories increased by 2.8 million barrels in the week ended 5 October. The markets had anticipated a 2.2 million barrel increase.
"Markets are behaving as if they really do expect there will be some last-minute result," Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, told the news agency.
"We're not really seeing major nervousness. If we don't get a solution, we will have to look at a slowing in the US economy and ramifications for global economies," Hansen added.
The US government shutdown will enter its ninth day on 9 October and Congress has nine days to decide on whether to raise the US debt limit.
The world's largest economy will run out of cash to pay its bills on 17 October if the government's borrowing limit is not raised. The country's laws limit its borrowing to $16.7tn (£10.4tn, €12.3tn).
On 8 October, speaking at a news conference, US President Barack Obama urged House Republicans to approve the US budget and raise the government's borrowing limit.
Obama made it clear that discussions were possible only after the two disputes were solved.
International Pressure Mounts
America's biggest creditor, China has put the pressure on the US Congress to sort out their political differences and agree on a new debt ceiling after becoming concerned over its $1.3tn worth of investments in the country.
In a press conference in Beijing, Chinese Vice Foreign Minister, Zhu Guangyao said that "the clock is ticking" and the US should resolve its political impasse and approve an extension of the national borrowing limit.
A senior official at the Bank of Japan (BoJ) has warned the North American Congress that the ongoing US government shutdown over the debt ceiling crisis will adversely impact the global economy and asked for a "prompt resolution" of the issue.
Deputy Governor Hiroshi Nakaso said in a speech that the US economy is facing the "greatest uncertainty" due to the fiscal consultation issue on which the Democrats and the Republicans opposing each other sharply.
The US government entered into a partial shutdown from the beginning of October after its Parliament failed to pass a budget for 2014.
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