Hopes that US will avoid tumbling off fiscal cliff push oil prices higher

Benchmark oil for February delivery rose 27 cents at late afternoon Bangkok time to US$91.25 per barrel in electronic trading on the New York Mercantile Exchange. Prices rose sharply Wednesday on higher U.S. home prices and hopes of a budget deal in Washington. The contract jumped US$2.37, or 2.7 percent, to finish at US$90.98 per barrel in thin post-Christmas trading in New York.

U.S. President Barack Obama was returning to Washington on Thursday after a brief vacation to resume budget talks with Congress. Negotiations are aimed at avoiding the fiscal cliff, the deep budget cuts and tax increases that would kick in on Jan. 1 and that some say would send the U.S. into another recession.

Later Thursday, the Conference Board will release its December survey of consumer confidence. The forecast is that the confidence index declined to a reading of 71 from 73.7 in November. A separate survey last week from the University of Michigan showed consumer confidence tumbled this month. Consumers may be starting to worry about whether Congress and Obama can reach a budget deal.

In London, Brent crude, used to price various kinds of foreign oil, fell 11 cents to US$110.96 per barrel.

In other energy futures trading on the New York Mercantile Exchange:

— Heating oil rose marginally to US$3.0367 a gallon.

— Wholesale gasoline fell 0.1 cent to US$2.8148 a gallon.

— Natural gas fell 2.3 cents to US$3.369 per 1,000 cubic feet.

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