Oil price 2

Brent crude gained by eight cents to hit $108.89 per barrel today, amid apprehensions regarding the state of the global economy and the outlook for oil demand.

US crude slipped by 15 cents to $87.73 per barrel, while gasoline stocks rose by the biggest weekly margin in more than 11 years, reported Reuters.

Investors continued to watch the developments pertaining to US fiscal cliff deal, which if not finalised could push the world’s top oil consumer back into recession, therefore impacting the oil demand.

Oil prices, however, received some support with President Barack Obama announcing that a deal to avoid the looming fiscal cliff can be reached in "about a week", if Republicans are ready to compromise on taxes.

In Europe, business surveys have indicated that the region experienced some relief from recession in November, but provided no indicator of when when it could emerge from the situation.

A European Central Bank policy meeting to be held later in the day is expected to provide some clues on a future policy path.

Uncertainty over oil supply from the Middle East region because of tensions in several areas has offered support to Brent crude, which ended in gains after slipping in the last three sessions.

In the Middle East, tension still continues with Iran alleging that there is evidence which shows a US intelligence drone was spying on the country’s military sites and oil terminals.

Israel has also moved ahead with its plan to build settler homes in one of the most sensitive areas of the West Bank.

Image: US crude slipped, as investors continued to watch the developments pertaining to US fiscal cliff deal. Photo courtesy of Trevor MacInnis.