Oil prices drop on Fed tapering speculation

Oil prices fell Friday as investors fretted over a possible tapering of the Federal Reserve' s loose monetary stimulus as soon as next week. U.S. House of Representatives on Thursday approved a two-year budget plan crafted by bipartisan negotiators, a further step towards removing the threat of a government shutdown early next year. The bipartisan plan, however, failed to propel oil price higher as it's widely anticipated that reduced fiscal risk would increase the likelihood that the U.S. central bank would scale back its quantitative easing in its next policy meeting scheduled for Dec. 17-18. Investors are cautious ahead of the Federal Reserve's policy meeting next week as economic data showed U.S. economy continues to improve. The number of Americans who initially applied for jobless benefits last week rebounded from a three-month low to a two-month high, the Labor Department said on Thursday. Data showed the advance figure for seasonally adjusted initial claims surged 68, 000 to 368,000 in the week ending Dec. 7. Moreover, U.S. retail and food services sales for November advanced 0.7 percent, their biggest rise in five months, the Commerce Department said Thursday. The fresh figure followed a 0.6- percent increase in the prior month, a sign of strengthening economic growth. Light, sweet crude for January delivery lost 90 cents to settle at 96.6 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude, a benchmark for international oils, for January delivery rose 16 cents to 108.83 dollars a barrel.