Oil Advances After Progress on U.S. Budget Agreement - report
Oil rose for a third day in New York on speculation that an agreement will be reached to avert a U.S. budget impasse that would trigger automatic spending cuts and tax increases next year, sapping demand for fuels, Bloomberg said.
West Texas Intermediate futures gained as much as 0.8% following yesterday's close at the highest level in almost two weeks. In discussions on the so-called fiscal cliff, President Barack Obama made a new offer after House Speaker John Boehner dropped his opposition to raising tax rates for some top earners. Crude supplies shrank last week while fuel stockpiles rose, according to a Bloomberg News survey before an Energy Department report tomorrow.
Crude for January delivery climbed as much as 72 cents to US$87.92 a barrel in electronic trading on the New York Mercantile Exchange and was at $87.76 at 1.35 p.m. London time. The contract, which expires tomorrow, rose 47 cents to $87.20 yesterday, the highest close since Dec. 5. The more-actively traded February future advanced 57 cents to $88.24 a barrel.
Brent for February settlement on the London-based ICE Futures Europe exchange gained as much as 82 cents, or 0.8%, to $108.46 a barrel. The front-month European benchmark contract was at a $20.10 premium to the corresponding WTI future. The spread was $19.97 yesterday, the narrowest since Oct. 19.
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