Benchmark oil for February delivery rose to US$92.5 per barrel in electronic trading on the Nymex, after rising by over a dollar to finish at US$91.8 at the start of the week. The latest rise has been triggered as US lawmakers passed legislation to avoid a "fiscal cliff'' that would have push the world's biggest economy into recession.
Economists had warned that if Congress did not take action, the series of tax increases and spending cuts that technically took effect at midnight on January 1 could send the US into recession. They feared a spike in unemployment, which would have resulted in depressed demand for energy. Some House Republicans at first opposed the bill, which neutralizes middle class tax increases and US$24 billion in spending cuts set to take effect over the next two months while raising taxes on the wealthy.