Brent crude oil continued to climb on Wednesday morning, trading at $108.92. Prices were lifted as U.S. lawmakers furthered their negotiation of the 2013 budget and worked to avert the upcoming ‘fiscal cliff'.
Markets were lifted as news on Tuesday reported that that President Obama and Speaker of the House John Boehner were close to reaching an agreement on how to handle the nation's deficit. The two initially clashed over whether or not to tax wealthy Americans, something Obama claimed was essential and Boehner vehemently refused.
Bloomberg reported that the latest proposal has come from President Obama, and includes tax increases for any household with an income over $400,000 per year. The plan reduces federal spending by $1.22 trillion and raises the income level from the originally proposed $250,000.
Boehner told reporters on Tuesday that he would present another budget plan that increases taxes for those with an income more than $1 million. He said he would continue to negotiate with the president, and expects the negotiations will wrap up by the end of the week.
The positive influence surrounding these budget talks has lifted the markets and increased confidence that the U.S. will avoid a recession in 2013 and continue to support crude demand.
Also lending support to Brent prices was a Bloomberg survey which anticipates a report on Wednesday that will show that oil stockpiles have dropped. Many are expecting the Energy Department to report U.S. crude inventories dropped significantly in the week that ended on December 14.
