Oil holds near $97 ahead of US debt ceiling vote

AP News
Posted: Jan 23, 2013 7:38 AM

The price of oil was steady near four-month highs around $97 a barrel on Wednesday as markets awaited a vote in Congress which would provide a temporary solution to the debt ceiling crisis and avoid America's first-ever default.

By early afternoon in Europe, benchmark oil for March delivery was up 13 cents at $96.81 a barrel in electronic trading on the New York Mercantile Exchange.

The U.S. House of Representatives is set to pass legislation later Wednesday which would allow the government to borrow money until May 18 without the need for further approval from Congress.

"It seems that investors would like to remain cautious ahead of the U.S. debt ceiling vote that could set the tone for the following trading sessions," said a report from analysts at Sucden Financial Research in London.

Price gains were limited by relatively weak monthly data of home sales and manufacturing, which raised concerns about the U.S. economy's growth prospects.

They were supported, on the other hand, by progress in a pipeline project which would transport crude from Canadian oil sand fields to refineries along the U.S. Gulf Coast.

"Nebraska has approved the new route for the Keystone XL pipeline, thus removing one major obstacle to (its) construction," said analysts at Commerzbank in Frankfurt. "This also increases the chances of approval from the U.S. government, though the decision has been postponed until the end of March."

Brent crude, used to price international varieties of oil, was up 6 cents to $112.48 per barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

— Natural gas added 0.7 cent to $3.565 per 1,000 cubic feet.

— Wholesale gasoline advanced 0.95 cent to $2.8506 per gallon.

— Heating oil was little changed at $3.0559 a gallon.


Pamela Sampson in Bangkok contributed to this report.