Crude-oil futures soared in Asia on the first trading day of 2013, with
the U.S. benchmark rising by over $1 after the U.S. House approved a
bill to address the fiscal cliff-a bevy of tax increases and government
spending cuts slated to begin in January.
On the New York Mercantile Exchange, light, sweet crude
futures for delivery in February traded at $92.82 a barrel at 0627 GMT,
up $1.00 in the Globex electronic session. February Brent crude on
London's ICE Futures exchange rose $0.88 to $111.99 a barrel.
The markets were closed Tuesday for a public holiday.
After weeks of negotiations, the Republican-controlled House
of Representatives approved a far-reaching tax bill that raises the
tax-rate on couples with an annual income above $450,000, extends a
variety of expiring business and individual tax breaks, and postpones
for two months some across-the-board spending cuts.
"Finally, we have a breakthrough," Ker Chung Yang, a
commodities analyst at Phillip Capital told Dow Jones Newswires, adding
that the upbeat manufacturing data from China Monday also continued to elate investors.
"We are seeing a lot of buying interest now, thanks to a lift
in investor sentiment due to the bill," Victor Shum, managing director
at Downstream Energy Consulting told Dow Jones Newswires.
"Still, I don't really expect Nymex futures to move much
higher than current levels in the coming sessions," he said, adding that
near-term positive sentiment will wane and investors will shift focus
to assess the global oil market, which is well supplied.
Cushing, Oklahoma, supplies currently exceed a record level of
49 million barrels, Jim Ritterbusch at Ritterbusch & Associates
said in a note late Monday.
Still, European crude balances continue to show evidence of
tightness due to production slippage and steady refiner and export
activity, Mr. Ritterbusch said.
The Brent-WTI spread is trading below $19.50/bbl now. "We are
attributing much of this contraction to year-end liquidation since
fundamentals would appear more appropriate to differentials in the
$20-22 zone," Mr. Ritterbusch said.
Going forward, the market will closely track U.S. non-farm
payrolls data, a key barometer about the health of the economy, and the
U.S. crude stockpiles report from the Energy Information Administration
scheduled for Friday, market participants said.
Nymex reformulated gasoline blendstock for February--the
benchmark gasoline contract--rose 260 points to $2.7877 a gallon, while
February heating oil traded at $3.0492, 174 points higher.
ICE gasoil for January changed hands at $942.25 a metric ton, up $15.25 from Tuesday's settlement.