U.S. crude oil prices slipped slightly Tuesday as investors worried about the tough negotiations between the White House and the Congress on raising debt ceiling.
As U.S. lawmakers returned to budget talks, financial markets started to worry about the debt ceiling issues. As expected, the talks between the Democrats and the Republicans will be extremely bitter, making an agreement on raising debt ceiling difficult. Once there was no deal, the United States would face a default risk that would shock the markets.
Investors also kept a close watch on the European economy.
According to data released Tuesday, German's exports fell 3.4 percent and industrial orders shrunk by a more-than-expected range of 1.8 percent in November, reinforcing concerns that Europe's largest economy may have contracted in the fourth quarter of 2012.
The European Central Bank will meet on Thursday, discussing about further monetary policies. Markets were hoping for hints of more interest rate cuts that could help the struggling European economy.
The dollar also rose against a basket of currencies, posing pressure to the dollar-denominated crude.
But U.S. crude prices got some support from market's speculation that expansion of the Seaway Pipeline connecting Cushing, Oklahoma, the delivery point of the U.S. benchmark futures contract, to the Gulf Coast would be completed by Friday. Easing inventories pressure at Cushing would be a boost to U.S. crude benchmark prices.
Light, sweet crude for February delivery lost 4 cents, or 0.04 percent, to settle at 93.15 dollars a barrel on the New York Mercantile Exchange.
But the Brent crude for February delivery edged up 54 cents, or 0.48 percent, to finish at 111.94 dollars a barrel.