Oil market dogged by US fiscal cliff worries

Global oil prices drifted lower in quiet Christmas Eve trade on Monday, with investor sentiment dogged by a stalemate in US talks on agreeing a deal to avert the fiscal cliff, analysts said. New York's main contract, light sweet crude for delivery in February dipped six cents to $88.60 a barrel. Brent North Sea crude for February reversed 31 cents to $108.66 per barrel in London midday deals. "With (US) politicians out on recess, sovereign credit markets closed and a general lack of vigour in seasonal markets, there’s not much to chew on today with crude oil prices edging lower in decidedly thin volume," noted Sucden analyst Jack Pollard. Traders are deeply concerned at the political bickering in Washington over a new budget to replace a package of deep spending cuts and huge tax hikes due to take affect on January 1. In recent weeks, Democratic and Republican leaders have rejected offers from the other side and broke for the Christmas holiday on Saturday blaming each other for failing to find a deal. If the painful package kicks in, most economists say the economy will tip into recession, which would have a knock-on effect around the world. "We've still got concerns over where we stand in the fiscal cliff... that remains a concern that keeps traders cautious," added Jason Hughes, head of premium client management for IG Markets Singapore.