* Boehner offers to accept tax hike for wealthiest Americans
* White House yet to accept Boehner’s proposal
* Iran nuclear talks unlikely to yield results – source
By Florence Tan
SINGAPORE, Dec 17 (Reuters) – Brent crude held steady above
$108 a barrel on Monday, drawing support from a brighter
economic outlook for top energy consumer China, although
investors remained skittish as U.S. talks to avert a year-end
“fiscal cliff” dragged on.
Commodities staged their biggest collective gain
in two weeks on Friday, led by a rally in oil prices, as data
showed China’s manufacturing sector expanded in December at its
fastest pace in more than a year, reinforcing belief that the
world’s No. 2 economy was regaining strength.
Brent crude stretched its gains into Monday, rising
13 cents to $108.31 a barrel by 0240 GMT. U.S. crude rose
21 cents to $86.94 and its January contract will expire on Dec.
19.
“We’re just seeing a bit of consolidation after that uptick
in China data improved sentiment,” Ben Le Brun, a markets
analyst at OptionsXpress in Sydney.
“The market is looking for the next leg-up and that would
have to do around talks involving the U.S. fiscal cliff.”
U.S. House of Representatives Speaker John Boehner’s offer
to accept a tax rate increase for the wealthiest Americans
knocks down a key Republican roadblock to a deal on the year-end
“fiscal cliff,” but a deal has yet to be done, despite the
looming deadline.
Failure to avert some $600 billion of tax hikes and spending
cuts scheduled to start in January could throw the U.S. back
into recession, denting the outlook for demand from the country
which is the world’s top oil consumer.
“Boehner and Obama may have found some common ground and I’m
surprised that we haven’t seen an improvement in oil prices,” Le
Brun said, adding that this could be because trade volume is low
during Asian hours.
Investors remained cautious as money managers cut their net
U.S crude futures and options positions by 29,449 contracts to
127,751 in week to Dec. 11, the U.S. Commodity Futures Trading
Commission said on Friday.
MIDDLE EAST
Fears of oil supply disruption stemming from tensions in the
Middle East are also underpinning crude prices.
Iran’s oil revenues have been cut in half this year from a
year ago, a newspaper quoted Iran’s economic minister as saying,
an admission of how deeply Western sanctions are cutting
Tehran’s chief source of funds.
The U.N. International Atomic Energy Agency expects to reach
a deal with Iran next month to resume a stalled investigation
into suspected nuclear weapon research, the chief U.N. inspector
said after returning from Tehran on Friday.
But a member of Iran’s nuclear negotiation team said talks
between Iran and world powers were unlikely to yield results.
“There is some uncertainty surrounding North Korea and the
Middle East,” Le Brun said. “These issues will probably be a
focal point for 2013 rather than the rest of the year.”
North Korea rattled the world last week by putting a
satellite into orbit for the first time and the United Nations
Security Council is to discuss how to respond to the launch.
(Editing by Himani Sarkar)
