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Oil prices gained today on hopes that the United States’ budget crisis may soon be resolved and therefore avert the country from another possible recession.

Brent crude increased by 33 cents to $109.17 a barrel, while US oil gained by eight cents to $88.01, reported Reuters.

Oil prices are expected to receive further support if US inventory figures are close to a sharp fall, as predicted by API.

On Tuesday, political negotiations intensified over the deal to keep the US economy safe from another slowdown, in view of the looming fiscal cliff next year.

Republicans, however, continued with their dialogue to squeeze more tax-rate concessions out of The White House.

According to the data issued by the American Petroleum Institute, US crude stocks dropped in the week ending 14 December by 4.1 million barrels, owing to a decline in import rates and mixing of refined product stocks as processing rates increased.

The decline is far higher than the 1.1 million barrel drop forecast by a Reuters poll. Oil prices are also being heavily influenced by the ongoing tensions in the Middle East region.

Iran said it will continue with its nuclear programme, ahead of planned fresh talks with world powers, while Israel reiterated that it will carry out air strikes on Iran if the country does not stop its nuclear work through diplomacy or sanctions.

Image: Oil values gained on hopes that a budget crisis in the US may soon be resolved. Photo courtesy of Jnn13.