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Crude Gains on Hopes for Deal Between US Politicians

December 31, 2012 at 19:33 by Vladimir Vyun

Crude oil advanced today on hopes that US politicians will make a last-minute deal to avoid the $600 billion in automatic tax hikes and spending reductions. Senate Majority Leader Harry Reid, who previously was complaining about lack of progress in negotiations, said that an agreement can yet be reached. Not many analysts believe that time has left for achieving such a compromise, but some of them also think that the so-called fiscal cliff will not be too ruinous for the US economy.

Crude also gained as China’s manufacturing expanded this month. China’s manufacturing Purchasing Managers’ Index rose from 50.5 in November to 51.5 in December, reaching the highest reading since May 2011. A figure above 50.0 indicates expansion.

February futures for delivery of crude oil (WTI) advanced $0.72 (0.79 percent) to $91.53 per barrel as of 19:27 GMT on NYMEX today. Contract for delivery of Brent crude in February rose $0.32 (0.29 percent) to $110.95 per barrel on ICE.

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