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Oil rises as 'cliff' deadline approaches

In afternoon trading benchmark oil rose 67 cents to $91.47 per barrel in New York.

The Associated Press

12/31/2012

NEW YORK  — Oil prices rose Monday with hopes that U.S. political leaders are getting closer to avoiding the "fiscal cliff" just hours before the deadline.

Negotiators for the White House and congressional Republicans in Congress, working against a midnight deadline, narrowed their differences Monday on legislation to avert across-the-board tax increases and spending cuts set to trigger on Tuesday.

But Republicans and Democrats remain divided, and it appears likely that financial markets will start 2013 without a clear picture of the budget policy of the U.S. economy — the world's largest.

In afternoon trading benchmark oil rose 67 cents to $91.47 per barrel in New York. Oil has wavered in recent weeks along with the ups and downs of the budget negotiations. Through Friday oil had gained about 2 percent this month. Failure to reach a deal could eventually send the U.S. into another recession, which would drive down demand for energy.

Brent crude, used to price international varieties of oil, rose 35 cents to $110.97 a barrel.

The national average for gasoline hit $3.29 per gallon, well under the average of nearly $3.40 a month ago but 2 cents higher than a year ago.

In other energy futures trading:

Natural gas fell 11 cents, or 3.3 percent, to $3.37 per 1,000 cubic feet.

Wholesale gasoline rose 1 cent to $2.77 a gallon.

Heating oil gained a penny to $3.03 a gallon.

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