Oil hits 1-month high on Mideast fears, hopes of averting US scal cliff'

NEW YORK, N.Y. – The price of oil closed at its highest point in nearly a month Monday on rising concerns about the Middle East and less worry about the U.S. “fiscal cliff.”

Benchmark West Texas Intermediate crude rose $2.36, or 2.3 per cent, to finish at US$89.28 a barrel in New York. That’s the highest since Oct. 22.

Brent crude, which is used to price international varieties of oil, rose $2.75, or 2.5 per cent, to end at US$111.70 a barrel in London.

President Barack Obama and leaders of the House and Senate appeared to have constructive discussions Friday to avoid a series of automatic tax increases and spending cuts scheduled to kick in on Jan. 1 in the absence of government action. Economists have been warning of dire consequences if no action is taken, including the possibility of another recession.

Overseas, the escalating conflict between Israel and Hamas raised concerns about Middle East crude supplies. Analysts say supplies could be disrupted if the conflict engulfs countries elsewhere in the Middle East, a region that produces more than one-third of the world’s oil.

In other energy futures trading on the New York Mercantile Exchange, wholesale gasoline rose four cents to finish at $2.75 a U.S. gallon (3.70 litres), heating oil gained nine cents, or three per cent, to end at US$3.08 a gallon and natural gas fell seven cents to finish at $3.72 per 1,000 cubic feet.