Crude futures top $92 after U.S. fiscal-cliff pact


Crude futures top $92 after U.S. fiscal-cliff pact


LONDON (MarketWatch) -- Crude-oil futures jumped well above $92 a barrel, gaining after U.S. policy makers passed a last-minute budget deal to avert the fiscal cliff of spending cuts and tax hikes, while China manufacturing data also lifted sentiment.

Crude for February delivery (CLG3) rose 96 cents, or 1.1%, to trade lately at $92.78 a barrel. The gains came as the House of Representatives and the Senate on Tuesday approved a deal preventing a raft of austerity measures from coming into effect in 2013, which had posed a threat of pushing the U.S. economy into recession.

Among its other features, the deal raises tax rates on individual incomes of more than $400,000 and on couples' incomes over $450,000, extends unemployment benefits, and delays across-the-board spending cuts for two months.

Worries that a deeply divided Washington would fail to reach a deal in time stirred financial markets in recent months. The approval spurred risk-on trading across most markets, helping depress the safe-haven U.S. dollar.

The ICE dollar index (DXY), which measures the greenback against a basket of six other currencies, fell to 79.45 after trading at 79.792 late Monday in North America. Dollar-denominated commodities tend to rise on a weaker U.S. currency, as they get cheaper for other currency holders.

Data out of top-energy consumer China also supported oil prices. Official data released Tuesday showed that the country's manufacturing Purchasing Managers' Index remained unchanged at 50.6 in December, below expectations, but above a 50-point threshold that indicates an improvement in activity.

Also in the first trading session of 2013, most futures were on the rise. Gasoline for February delivery (RBG3) rose 0.8% to $2.78 a gallon, while heating oil for the same month (HOG3) picked up 0.4% to $3.04 a gallon. March natural gas (NGH13) fell 0.7% to $3.34 per million British thermal units.

Dow Jones Newswires

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