Oil prices up in Asian trade

December 05, 2012 | 10:31

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Oil prices were higher in Asian trade on Wednesday but sentiment was weighed by uncertainty over untangling a gridlock in US budget talks.

New York's main contract, light sweet crude for delivery in January was up 17 cents to $88.67 a barrel in the morning, while Brent North Sea crude for January climbed eight cents to $109.92.

Markets have been on the edge for weeks due to the budget impasse in Washington.

Analysts fear the US economy -- a key engine for global growth -- will lurch back into recession if no deal is reached between the Republicans and Democrats to avert the year-end "fiscal cliff" of significant tax increases and spending cuts.

"We continue to think that more pressure is needed for both parties to reach a solution. That is why we do not expect to get better visibility on the shape of a potential deal until much closer to the end of the year," Dutch bank ABN Amro said in a market note.

Markets are also waiting for the release of the weekly report on US oil supplies, a closely watched set of data seen as a barometer of demand in the world's biggest crude-oil consuming country, other analysts said.

AFP

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