Oil Rises on Budget Deal Optimism: Report
Oil in New York rose on optimism that negotiators will reach a last-minute U.S. budget deal that would avert more than $600 billion of tax increases and spending cuts that threaten economic growth, Bloomberg reported.
Futures climbed as much as 0.6% as Democrats and Republicans discussed how to avoid the budget measures known as the fiscal cliff. Senate Majority Leader Harry Reid said he's hopeful an agreement can be reached that would protect all but top earners from higher taxes. Oil in New York headed for its first annual drop since 2008 as U.S. crude production surged.
Crude oil for February delivery increased 44 cents, or 0.5%, to $91.24 a barrel on the New York Mercantile Exchange. Prices are down 7.7% this year. The volume for West Texas Intermediate oil contracts traded in New York was 59% below the 100-day average.
Brent oil for February settlement dropped 14 cents to $110.48 a barrel on the London-based ICE Futures Europe exchange.
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