Oil prices rally on US debt deal

16th October 2013, Comments 0 comments

World oil prices rallied on Wednesday, mirroring a turnaround for equities, after US lawmakers finally struck a deal aimed at avoiding a default of its debt.

New York's main contract, West Texas Intermediate (WTI) for delivery in November, jumped $1.36 to $102.57 a barrel.

Brent North Sea crude for November climbed 96 cents to stand at $110.92 a barrel in late London trading.

Senate Majority Leader Harry Reid on Wednesday said that a deal had been reached with Republican leaders to end a fiscal impasse that has threatened the United States with default.

Reid, speaking from the Senate floor, said the agreement called for reopening the federal government with a temporary budget until January 15 and to extend US borrowing authority until February 7.

"The compromise we reached will provide our economy with the stability it desperately needs," Reid said.

Senator Mitch McConnel, the top Republican, followed, confirming the agreement, which has to be approved by both the Senate and the Republican-controlled House.

US borrowing authority is on track to expire at midnight, and without an agreement the United States runs the risk of a default with potentially devastating consequences.

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© 2013 AFP

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