Oil rises on hopes for "fiscal cliff"

Crude prices rose on the last trading day of 2012 as hopes for a last-minute "fiscal cliff" deal in U.S. Congress increased. Market sentiment was boosted after U.S. President Barack Obama said at noon that an agreement to avert the "fiscal cliff", particularly the impending tax hikes for middle-class Americans, was "within sight" but "not done" yet. Obama's remarks came as U.S. lawmakers were trying to pitch up a budget deal that both the Senate and House would approve to avert the automatic tax hikes and broad spending cuts due to kick in on Tuesday. To add to the positive tone, top U.S. Senate Republican Mitch McConnel said on the Senate floor that Democrats and Republicans are very close to a deal and his talks with the Vice President Joe Biden is successful and an agreement has been reached on all the tax issues. All the signs eased fears among investors over "fiscal cliff", which has been pressuring the crude markets for months. Light, sweet crude for February delivery gained 1.02 dollars, or 1.12 percent to settle at 91.82 dollars a barrel on the New York Mercantile Exchange. For the whole 2012, WTI dropped 7.01 dollars, or 7.09 percent, ending a three-year streak of gains as " shale-oil revolution" boosted domestic production and pressured on the prices. Brent crude, the more international benchmark, rose slightly by 49 cents, or 0.44 percent to settle at 111.11 dollars a barrel on Monday. For the year, Brent rose 3.73 dollars, or 3.47 percent. On Monday, oil also got supports from China's upbeat data. The HSBC China manufacturing purchasing managers' Index rose to a 19- month high of 51.5 in December, showing further expansion in the world's second-largest economy's manufacturing. Trading volume on Monday were still light, with turnovers of WTI and Brent 70 percent, 58 percent under their 30-day averages, respectively.