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Heating Oil, Gasoline Rise on Budget Talks and Economic Gains

Heating oil and gasoline climbed on optimism U.S. lawmakers will reach consensus on a budget deal and as economic reports showed some gains for the economy.

Futures rose as Treasury Secretary Timothy F. Geithner met today with congressional leaders as part of an effort to avoid automatic spending cuts and tax increases set to begin in January. U.S. jobless claims fell last week, the economy expanded more than previously estimated in the third quarter and pending home sales rose in October.

“Every time we think we’re going to get a deal done to avoid the fiscal cliff, the market is very happy,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “The economic data has been pretty upbeat. We’re daring to hope again and to think demand may improve.”

December-delivery heating oil rose 3.26 cents, or 1.1 percent, to settle at $3.0406 a gallon on the New York Mercantile Exchange. Prices are down 0.9 percent this month.

The more actively traded January contract climbed 3.6 cents, or 1.2 percent, to $3.0569. December heating oil and gasoline futures will expire tomorrow.

Geithner is meeting separately with each of the top four leaders in Congress a day after chief executives from more than a dozen U.S. corporations shuttled from the Capitol to the White House and pressed both sides for an agreement.

Gasoline for December delivery gained 5.31 cents, or 1.9 percent, to $2.787 a gallon, the highest settlement since Oct. 16. Prices have risen 0.9 percent in November. The January contract advanced 4.57 cents, or 1.7 percent, to $2.7334.

Pipeline Shut

December futures touched $2.792 after Colonial Pipeline Co. shut its main gasoline line today that carries more than 1.4 million barrels a day from Houston to Greensboro, North Carolina, to investigate a leak at its Houston terminal. The line reopened downstream of Houston at 2 p.m. local time, the company said.

Gross domestic product grew at a 2.7 percent annual rate, up from a 2 percent prior estimate, revised figures from the Commerce Department showed today.

Applications for jobless benefits decreased by 23,000 to 393,000 in the week ended Nov. 24, a report from the Labor Department also showed.

The index of pending home resales climbed 5.2 percent in October, after a revised 0.4 percent gain in September, figures from the National Association of Realtors showed today.

Boehner Comments

Futures pared gains briefly after House Speaker John Boehner told reporters today in Washington that “no substantial progress” has been in talks between congressional leaders and the White House and that “there is a real danger of going off the fiscal cliff.”

“We had some positive economic news that kind of offset Boehner’s comments that no progress had been made,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.

The average nationwide cost for regular gasoline fell 0.6 cent to $3.409 a gallon, AAA said today on its website. That’s the lowest average since July 16. The pump price reached a 2012 high of $3.936 on April 4.

-- With assistance from Shobhana Chandra, Michelle Jamrisko, Alex Kowalski, Heidi Przybyla and Roxana Tiron in Washington. Editors: David Marino, Richard Stubbe

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