NEW YORK - The price of oil wavered between small gains and losses Thursday afternoon as traders balanced concerns over an apparent impasse in Washington's critical budget negotiations with enthusiasm over steps taken to boost the slow-growing economy.
President Barack Obama and Republican leaders don't appear to be close a deal to avert the so-called fiscal cliff before year's end. Without an agreement, hundreds of billions of dollars in tax increases and government spending cuts will automatically take effect in January.
Optimism surrounding the Federal Reserve's latest move to boost the U.S. economy drove oil higher when it was announced Wednesday. Any sign of an improving economy could spur energy demand.
Benchmark crude fell 12 cents to $86.65 a barrel in afternoon trading Thursday in New York.
Prices at the pump continued to move lower. The average price for a gallon of regular unleaded dropped more than a penny overnight to $3.30, the lowest point since July 3. That's still about 3 cents more than a year earlier.
Brent crude, used to price international varieties of oil, fell 55 cents to $107.47 a barrel on the ICE Futures exchange in London.
In other energy futures trading on New York Mercantile Exchange:
- Heating oil was flat at $2.97 a gallon.
- Natural gas lost 3 cents to $3.35 per 1,000 cubic feet.
- Wholesale gasoline fell 1 cent to $2.63 a gallon.
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