NYMEX-Crude drops below $88 on sputtering US budget talks

SINGAPORE Fri Nov 30, 2012 6:32am IST

Polluted waters of China

Polluted waters of China

Growing cities, overuse of fertilizers, and factory wastewater have degraded China's water supplies to the extent that half the nation's rivers and lakes are severely polluted.  Slideshow 

SINGAPORE Nov 30 (Reuters) - U.S. crude dropped below $88 per barrel on Friday as key budget talks to avert a looming fiscal disaster in the United States appeared to be stalling, denting the outlook for oil demand from the world's top consumer.

FUNDAMENTALS

* U.S. crude for January delivery was down 37 cents to $87.70 a barrel by 0100 GMT.

* House of Representatives Speaker John Boehner said on Thursday that "fiscal cliff" talks with the White House had made no substantive progress and criticized President Barack Obama and Democrats for failing to get serious about including spending cuts in a final deal.

* The U.S. economy grew faster than initially thought in the third quarter as restocking by businesses provided a big boost, but consumer and business spending were revised lower in a sobering reminder of the recovery's underlying weakness.

* The U.S. Senate is set to consider a broader set of economic sanctions on Iran's energy, port, shipping and ship-building sectors, as lawmakers look for new ways to pressure Tehran to stop efforts to enrich uranium to levels that could be used in weapons.

* An Islamist-led assembly was expected to finalize a new constitution on Friday aimed at transforming Egypt and paving the way for an end to a crisis which erupted when President Mohamed Mursi gave himself sweeping new powers last week.

* Syrian rebels battled forces loyal to President Bashar al-Assad just outside Damascus on Thursday, cutting access to its international airport, and Dubai-based Emirates airline and EgyptAir stopped flights to the Syrian capital.

MARKETS NEWS

* U.S. stocks finished higher on Thursday as investors bought on sporadic dips in a market roiled by conflicting comments from Washington about negotiations on an agreement to avoid the "fiscal cliff".

* The euro came off a one-month high against the dollar on Thursday after Boehner dented hopes for a budget deal that could prevent the U.S. economy from slipping back into a possible recession next year.

DATA/EVENTS (GMT)

0500 Japan Construction orders Oct

0530 India GDP Q2

0700 Germany Retail sales Oct

0745 France Consumer spending Oct

0900 Italy Unemployment rate Oct

1000 Euro zone Inflation Nov

1100 Brazil GDP Q3

1445 U.S. Chicago PMI Nov

1930 U.S. CFTC commitment of traders data (Reporting by Luke Pachymuthu; Editing by Himani Sarkar)

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