Oil prices are rising as fiscal cliff talks resumed between President Obama and Republicans. The two are locked in a stalemate when it comes to the impending cliff, which is a series of tax hikes and spending cuts.
The two sides are under increasing pressure to come to an agreement in order to avoid the cliff. Their potential deals and conflicts have caused stock market prices to raise and drop.
The latest market affected has been oil prices. New Yock’s main contract, which is with West Texas Intermediate, has seen a price raise of $2.37 per barrel. Brent North Sea crude’s February delivery prices also climbed by $2.27 to $111.07 per barrel, reports Yahoo! News.
Experts have caused worry over the impending tax hikes and spending cuts, saying that these moves could push the United States back into a recession. The potential recession could also put a damper on oil demand with consumers trying to save money.
Lisa Finstrom of Citi Furutes and OTC Clearing stated, “Hopes for progress have been fueled by President Obama’s early return from his family vacation in Hawaii.”
James Williams of WTRG Economics added that the President’s early return could help gas prices go down again because Democrats and Republicans may reach an agreement before January 1.
ABC News notes that Jim Ritterbusch, the president of energy consultancy Ritterbusch and Associates, explained the rising oil prices by saying that there is light trading volume around the holidays. He added, “It doesn’t really take much buying to spike it.”
Despite the spike in trading prices, the cost of gas at the pump remained steadily low at a national average of $3.25 per gallon. The national average was at its lowest last Thursday when it reached $3.22 per gallon.
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