Gasoline and heating oil rose as President Barack Obama and House Republican leaders continued budget negotiations and as a stronger Brent boosted the prices of products produced with imported crude.
Futures climbed on optimism that Obama and House Speaker John Boehner will reach a deal to avert the so-called fiscal cliff, more than $600 billion in automatic tax increases and spending cuts set for January. Brent gained as much as 1.1 percent in London. German business confidence increased for a second month in December.
“The macro factors are all green,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “You have fiscal cliff hopes, there’s a better tone in Europe, more stimulus talks in Japan and expectations that the new government in China will come in and do some stimulus.”
Gasoline for January delivery rose 1.68 cents, or 0.6 percent, to $2.7077 a gallon at 9:51 a.m. on the New York Mercantile Exchange. Prices touched $2.7179, the highest intraday level since Dec. 4. Futures have advanced 0.8 percent this year.
Heating oil for January delivery increased 2.14 cents, or 0.7 percent, to $3.0179 a gallon, extending this year’s increase to 2.8 percent.
Brent rose 77 cents to $109.61 a barrel on the London-based ICE Futures Europe exchange.
“Products are back to tracking Brent,” Armstrong said.
The Energy Department is scheduled to report last week’s oil inventories at 10:30 a.m. in Washington. Gasoline stockpiles probably rose 2 million barrels and supplies of distillates, including heating oil and diesel, increased 1 million barrels, according to the median estimate of 11 analysts in a survey by Bloomberg.
The industry-funded American Petroleum Institute reported yesterday that gasoline inventories surged 4.18 million barrels, while distillates slipped 1.88 million.
The average nationwide cost for regular gasoline sank 1 cent to a $3.226 a gallon, AAA said today on its website. That’s the lowest level since Dec. 22.
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