Oil mixed as debt worries cloud investor mood

Agence France-Presse

Posted at Jul 27 2011 11:33 AM | Updated as of Jul 27 2011 07:33 PM

SINGAPORE - Oil was mixed in Asian trade Wednesday with investor sentiment clouded by Europe's debt woes and the political battle in the United States over its borrowing ceiling, analysts said.

New York's main contract, light sweet crude for September delivery fell 34 cents to $99.25 a barrel and Brent North Sea crude for September delivery rose 17 cents to $118.45.

"Sovereign debt issues continue to cap oil prices, and we suspect that for the larger part of this summer macro concerns and debt-related fears are likely to dominate the fundamentals," Barclays Capital's analysts said in a report.

"In the coming days, uncertainty is thus likely to persist," they said.

President Barack Obama and the Republicans remain divided over how to break an impasse that could see the world's richest nation and largest oil user default on its debt, with potentially ruinous global results.

With a week to go before the US Treasury says it will run out of cash to pay its bills, the dollar slid against key currencies and US stocks fell as markets measured the risk of an August 2 deadline passing without a breakthrough.

Meanwhile, International Monetary Fund managing director Christine Lagarde on Tuesday urged the eurozone to implement its plan to fight a sovereign debt crisis.