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Oil Falls to Near $88, Eyes on 'Cliff' Negotiations

NEW YORK (AP) Worries over the looming "fiscal cliff" and the health of the U.S. economy are driving oil prices lower Tuesday.

Benchmark crude is down 94 cents to $88.15 just after 10 a.m. in New York.

U.S. lawmakers have less than a month to reach a compromise to avoid a series of sharp tax increases and spending cuts that take effect in January. And on Monday, there was a sign that the failure to reach a deal is having a concrete effect on the economy.

U.S. manufacturing shrank in November to its weakest level since July 2009, the Institute of Supply Management said, brought on by the impact of Superstorm Sandy and worries over the fiscal cliff.

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