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Oil Rises As Obama Cuts Vacation Short for Budget Talks

“Oil rose in New York for the first time in three days as President Barack Obama will cut short his vacation for talks to avert spending cuts and tax increases that threaten the economy of the world’s biggest crude consumer.

West Texas Intermediate gained as much as 0.7 percent before Democrats and Republicans convene tomorrow for talks aimed at avoiding more than $600 billion in automatic measures known as the fiscal cliff, which are scheduled to take effect Jan. 1. Crude stockpiles in the U.S. probably fell last week to the lowest in 10 weeks as imports decreased, a Bloomberg News survey showed. The volume for all WTI contracts was down 85 percent on the 100-day average.

“It is good news that President Obama is cutting his holidays to negotiate a solution to the fiscal cliff,” Ehsan Ul-Haq, a senior market consultant at KBC Energy Economics in Walton-on-Thames, England, said by e-mail. “Thin volumes don’t represent the overall market sentiment.”

WTI for February delivery climbed as much as 60 cents to $89.21 a barrel in electronic trading on the New York Mercantile Exchange and was at $89.13 at 11:53 a.m. in London. Futures slid 5 cents to $88.61 on Dec. 24. There was no floor or electronic trading yesterday because of the Christmas holiday. Prices have lost 9.8 percent this year.

Brent for February settlement on the London-based ICE Futures Europe exchange gained 81 cents, or 0.7 percent, to $109.61 a barrel. The number of contracts trading was 81 percent lower than the 100-day average. The European benchmark crude was at a premium of $20.48 to WTI after closing at $20.29 on Dec. 24. Brent is up 2.1 percent this year…”

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