* 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
(Adds quotes, updates prices)
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 the belief that
the world’s No. 2 economy is regaining strength.
February Brent crude had edged up 2 cents to $108.20
a barrel by 0512 GMT. U.S. crude rose 17 cents to $86.90
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,” said 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 (with) 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,
the world’s top oil consumer.
“I see it as a positive development that one side … has
offered to raise taxes,” said Victor Shum, managing director at
IHS Purvin and Gertz in Singapore.
Yet investors remained cautious as money managers cut their
net U.S crude futures and options positions by 29,449 contracts
to 127,751 in the week to Dec. 11, the U.S. Commodity Futures
Trading Commission said on Friday.
DEEPLY CUTTING
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 and Joseph Radford)
