The price of oil edged lower today as talks between US political leaders on a crucial budget deal hit a new snag.
Benchmark crude for February delivery was down 10 cents to $89.88 a barrel in electronic trading on the New York Mercantile Exchange.
The contract had jumped $1.58 last night, the biggest one-day price rise in a month.
Brent crude, used to price international varieties of oil, fell 19 cents to $110.17 a barrel in London.
Talks between President Barack Obama and Republican House Speaker John Boehner have dictated market sentiment in recent weeks.
It appeared yesterday that a deal to avoid the "fiscal cliff" of automatic spending cuts and tax hikes due at the start of next year is still out of reach. The White House threatened to veto an alternative plan that Boehner proposed.
Without a deal, the hundreds of billions of dollars in spending cuts and tax hikes that will take effect could throw the US economy back into recession, analysts have said. Such a prospect would likely mean decreasing energy demand.
