Oil slipped below $102 a barrel Monday as a deadline loomed for U.S. lawmakers to agree on lifting the government's borrowing limit and crude supplies were forecast to growth further.
By early afternoon in Europe, benchmark crude for November delivery was down 47 cents at $101.55 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 99 cents Friday to close at $102.02 and lost $1.82 or 1.8 percent for the week.
Floor trading on the Nymex and other U.S. markets are closed Monday for Columbus Day.
Traders are watching the latest turns in the debt debate in Washington. The price of oil has swung back and forth for days as lawmakers try to resolve an impasse that left the government partially closed and the markets worried about the U.S. defaulting on its debt for the first time.
There was no agreement over the weekend. Failure to raise the U.S. borrowing limit by Thursday could result in a default on government bond interest payments, undermining the credibility of assets that are prized as collateral by banks worldwide and crucial to the functioning of the financial system.
"The main focus remains on the U.S. debt ceiling and government shutdown," said a report from analysts at Sucden Financial Research in London. "Markets are hoping for a resolution to the issue before Thursday's deadline."
Meanwhile, in its latest quarterly oil market report, the International Energy Agency predicted strong growth in non-OPEC supplies of crude oil, easily outpacing demand growth next year. The Paris-based IEA also said Friday that the United States would overtake Russia next year as the largest non-OPEC producer of liquid fuels, a category that includes other fuels on top of crude oil.
Reports that China imported a record 6.25 million barrels of oil a day in September helped set a floor under oil prices.
Brent, the benchmark for international crudes, was down 98 cents at $110.30 on the ICE futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline dropped 2.48 cents to $2.628 a gallon.
— Natural gas rose 2.1 cents to $3.797 per 1,000 cubic feet.
— Heating oil lost 1.84 cent to $3.0165 a gallon.