Crude Rises For The First Time In Three Days On Hopes Of A US Budget

Crude oil rose for the first time in three amid thin trade a day after Christmas, with many markets still being closed, as hope for a last-minute deal to avoid the fiscal cliff in the United States prevailed.

Democrats and Republicans plan to assemble tomorrow for talks aimed to meet a year-end deadline and avoid the $600 billion in tax gains and spending cuts known as the fiscal cliff scheduled to take effect on January 1st that may push the economy into recession.

U.S. President Barak Obama plans to end his vacation in Hawaii and return to Washington for tomorrow’s talks. This eased the worries over the outlook for demand on oil from the world’s largest energy consumer.

Meanwhile, U.S. crude stockpiles probably fell last week 1.7 million barrels, the lowest in 10 weeks, as imports dropped and refineries kept utilization at a high rate. The Energy Department is scheduled to release this report on Dec. 28 due to the Christmas holiday.

Adding to the upside pressures on oil prices was the improved outlook of the Japanese economy, the world’s third largest economy, after the yen slumped to its lowest level since April 2011 while lawmakers showed their willingness to add more stimulus.

Shinzo Abe, 58, is set to be sworn in as prime minister on Wednesday after leading his Liberal Democratic Party, which pushes for drastic stimulus policies, towards victory in the lower house elections earlier this month.

Oil prices also found support from the tensions in the Middle East. Six Gulf Arab states demanded on Tuesday that Iran ends its interference in the region, mainly in Syria, where the civil war that killed more than 44,000 people continues.

Crude oil is trading as of this writing around the $89.05 from the opening at $88.70 and with the highest at $89.13 and the lowest at $88.61. Brent is trading at $109.39 a barrel after rising 0.54%.

Natural gas is trading around $3.315 per 1,000 cubic feet after falling 0.93%; heating oil is trading around 3.015 after rising 0.43%; gasoline is trading around $2.756 a barrel after rising 0.20%.