Oil prices soared today, supported by positive signs that the US fiscal cliff dilemma will be resolved and also because of plans to expand pipeline capacity in the US.
Brent crude rose by 75 cents to $108.39 a barrel, while US oil rose by 55 cents to $87.75, reported Reuters.
Concerns regarding the looming fiscal cliff eased on Monday night, when the White House proposed the reduction of tax rates for the majority, but not for those who earn $400,000 or more.
This proposed amount is up from President Barak Obama’s original demand for a $250,000 tax threshold. However, it is far from House of Representatives Speaker John Boehner’s proposal of $1m.
US oil received support from the news that the United States is considering a pipeline capacity expansion, which is likely to help restrict the spread between the two contracts CL-LCO1=R.
Construction on the proposed pipeline to supply crude between Cushing, Oklahoma, and Houston, Texas, will be commenced by Enterprise Products and Enbridge in January 2013.
Image: The White House has proposed reducing tax rates for everyone, except for those who earn $400,000 or more. Photo courtesy of Andreas Praefcke.