* Some lawmakers voice concern U.S. may go over fiscal cliff
* Asian shares steady, U.S. budget concerns weigh
* Iran putting worst impact of sanctions behind it -oil
* Brent to revisit low of $107.58 - technicals
By Manash Goswami
SINGAPORE, Dec 24 Brent crude fell for a third
day, staying below $109 a barrel, as uncertainty over the
ability of the United States to resolve a budget crisis before a
year-end deadline stoked investor concerns about demand growth
in the world's top oil user.
The doubts over the so-called U.S. "fiscal cliff" that will
trigger harsh spending cuts and tax hikes and risk tipping the
country back into recession further dented investor appetite for
assets such as oil. Markets have been under pressure after U.S.
House of Representatives Speaker John Boehner failed to get
lawmakers support a deal with the White House.
Brent crude dropped 33 cents to $108.64 a barrel by
0350 GMT on Monday, while U.S. oil declined 14 cents to
"It's all about the U.S. fiscal cliff issue," said Victor
Shum, managing director at IHS Purvin & Gertz. "The chances are
that we will get a deal between the White House and the
Republicans, but the fact that Boehner failed to get members to
support his plan is worrying."
With just nine days left, some U.S. lawmakers are voicing
concerns the country would go over "the fiscal cliff." President
Barack Obama and Boehner, the key negotiators, are out of town
for the Christmas holidays. Congress is in recess, and will have
only a few days next week to act before the Jan. 1 deadline.
Given this scenario, investors are now looking at a stop-gap
that puts everything off for a while as the most promising
alternative. Such a fix may help delay the spending cuts and tax
hikes further into 2013 as well as work to address in a
long-term way a government budget that has generated deficits
exceeding $1 trillion in each of the last four years.
The uncertainty and rising oil supplies will continue to put
more downward pressure on prices in coming weeks, Shum said.
Iraq's oil production has exceeded 3.2 million barrels a day
(bpd) so far this month and may hit capacity of 4 million bpd in
2014, its Oil Minister Abdul Kareem Luaibi said.
Shum expects U.S. crude to trade between $85 and $89 a
barrel, with Brent around $20 more expensive than the U.S.
U.S. oil is expected to drop more to $87.30, according to
Reuters technical analyst Wang Tao, and Brent may keep declining
to $107.58, the Dec. 17 low, as a rebound from the Dec. 6 low of
$106.63 seems to have completed.
Losses were capped due to geopolitical tensions in the
Dozens of people were killed in an air strike while queuing
for bread in Syria's central Hama province on Sunday, activists
said, with some residents giving an initial count of 90 dead.
Such a toll, if confirmed, would make it one of the
deadliest air strikes in Syria's civil war.
Oil markets have also been on edge through most of the year
as tensions between Iran and the West escalated over Tehran's
disputed nuclear programme.
Western sanctions on Iran's shipping and energy sectors
caused serious problems for its oil industry earlier this year
but Iran has mostly overcome those challenges, Oil Minister
Rostam Qasemi was quoted as saying on Sunday.
Iranian officials usually play down the impact of U.S. and
European restrictions on the country's oil industry, but Qasemi
said Iran had faced some difficulties selling its oil this
(Reporting by Manash Goswami; Editing by Ryan Woo)