Oil prices steady as budget deal cheers fade

AP News
Posted: Jan 03, 2013 12:05 PM

NEW YORK (AP) — The price of oil was little changed Thursday as euphoria over a U.S. budget deal cooled and traders focused on bulging crude supplies and lackluster demand.

After falling most of the morning, benchmark crude for February delivery rose 6 cents to $93.18 a barrel on the New York Mercantile Exchange at midday. Prices jumped as much as 2 percent Wednesday after a deal in Washington averted the "fiscal cliff" of automatic tax increases and spending cuts.

Despite the stopgap budget deal, more hurdles are ahead for the U.S. economy, including a new deadline for more spending cuts in two months.

Investors were also gauging the underlying strength of the global energy market, where demand is weak and supplies are rising.

U.S. crude supplies were nearly 16 percent above the five-year average in the week ending Dec. 21, the most recent period for which statistics are available, according to the Energy Department. It also said U.S. production was at its highest point in 19 years. Data for last week will be released Friday. Analysts expect the report will show crude inventories dropped slightly but remain well above average.

Brent crude, used to price international varieties of oil, was down 15 cents to $112.32 a barrel on the ICE Futures exchange in London.

In other energy futures trading on the New York Mercantile Exchange:

— Wholesale gasoline was unchanged at $2.80 a gallon.

— Heating oil lost 2 cents to $3.03 a gallon.

— Natural gas fell 4 cents to $3.21 per 1,000 cubic feet.