Oil higher as Washington inches closer to deal in hours before 'fiscal cliff'

NEW YORK, N.Y. – Oil prices rose Monday as U.S. political leaders moved toward averting the “fiscal cliff” just hours before the deadline.

President Barack Obama said Monday afternoon that a deal to avert the cliff — a series of automatic tax increases and spending cuts set to take effect starting Tuesday — was in sight but not yet finalized.

Republicans and Democrats were still at an impasse over whether to put off across-the-board spending cuts and, if so, how to pay for that. There’s a midnight deadline to reach a deal.

Benchmark West Texas Intermediate crude rose $1.02 to finish at US$91.82 a barrel on the New York Mercantile Exchange.

Oil has wavered in recent weeks along with the ups and downs of the budget negotiations. The price of oil finished December up about three per cent from the start of the month. It ranged from a low near US$77 a barrel to high around US$110 a barrel during the year.

Brent crude, used to price international varieties of oil, rose 49 cents to end at US$111.11 a barrel in London.

In other energy futures trading on the Nymex, natural gas fell 12 cents, or 3.4 per cent, to finish at US$3.35 per 1,000 cubic feet; wholesale gasoline rose one cent to US$2.81 a U.S. gallon (3.79 litres) and heating oil was flat at US$3.05 a gallon.