Budget talks, home prices lift oil prices

Last updated 05:00 28/12/2012

Relevant offers

World

Markets 'cautious' but US stocks climb after US President Donald Trump's inauguration Davos - the rich are worried What's selling at the inauguration: Socks, mugs and Trump-scented candles Tesla avoids recall in probe of death linked to Autopilot Chinese e-commerce giant Alibaba becomes major Olympics sponsor Vegemite critic and rival Dick Smith cheers sale to Bega Cheese Donald Trump could send America into repeat of 1929 stockmarket crash, says Nobel prize winner Australian cheese company buys Vegemite off Kraft as part of $484m deal New Silk Road? First China-London freight train arrives Donald Trump's economy: Hope for the best, plan for the worst

Crude oil prices have risen sharply on higher US home prices and hopes of a budget deal in Washington.

Yesterday, US benchmark crude jumped US$2.37, or 2.7 per cent, to finish at $90.98 per barrel in thin post-Christmas trading in New York.

US home prices rose in most big cities in October, compared with a year ago, a key report showed. The improvement is adding to economic growth, which generally boosts energy consumption and lifts prices.

President Barack Obama will return to Washington today, after a brief holiday, to resume budget talks with Congress, which are aimed at avoiding the "fiscal cliff", the deep budget cuts and tax increases that could slow US growth.

While traders and investors kept an eye on the economy and the fiscal cliff, analysts noted that light trading during the holidays could cause broad swings in oil prices.

"We've got a very, very thin trade," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.

"It doesn't really take much buying to spike it."

Meanwhile, petrol prices at the pump held at an average of US$3.25 a gallon (3.78 litres). Petrol was at its lowest for the year last Friday, at an average of $3.22 a gallon.

In London, Brent crude, used to price various kinds of foreign oil, rose $2.27 to $111.07. AP

Ad Feedback

- The Dominion Post

Special offers

Featured Promotions

Sponsored Content