Oil prices rise as Obama heads back to Washington to resume 'fiscal cliff' negotiations - Macleans.ca

Oil prices rise as Obama heads back to Washington to resume ‘fiscal cliff’ negotiations


BANGKOK – The price of oil rose Wednesday after President Barack Obama indicated he would cut his Christmas holiday short and head to Washington to try to work out a deal to keep the U.S. from heading over the “fiscal cliff.”

Benchmark oil for February delivery rose 40 cents at midday Bangkok time to US$89.01 per barrel in electronic trading on the New York Mercantile Exchange.

On Monday, concerns over the stalemate in Washington drove benchmark oil prices lower, with the contract closing down 5 cents at $88.61 a barrel on the Nymex.

Obama was expected to arrive in Washington early Thursday, the White House said, after a brief vacation in Hawaii. Congress was also expected to return to the U.S. capital Thursday and begin budget negotiations.

Hopes that U.S. leaders might reach a budget deal helped buoy oil prices. Failure to agree on a plan before Jan. 1 would lead to spending cuts and tax hikes that economists predict will push the economy back into recession. Otherwise, the economy is expected to show slight improvement in 2013, a positive for energy consumption and prices.

In other energy futures trading:

— Brent crude, used to price international varieties of oil, rose 42 cents to $109.22 a barrel.

— Natural gas fell 2.8 cents to $3.318 per 1,000 cubic feet.

— Heating oil rose 1.4 cents to $3.0022 a gallon.

— Wholesale gasoline rose 1.6 cents to $2.75 a gallon.

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