Oil prices mixed amid US budget impasse

Oil prices were mixed Monday as investors eyed the budget impasse in the United States, the world's biggest consumer of crude. New York's main contract, West Texas Intermediate (WTI) for January delivery, rose 47 cents to settle at $87.20 a barrel. Brent North Sea crude for February delivery dropped 54 cents to close at $107.64 a barrel in London trade. Investors remained gripped by the looming US "fiscal cliff" of automatic tax rises and spending cuts that are due to take effect on January 1 unless a political deal is reached in Washington. Monday saw some movement on the matter, as President Barack Obama met with top Republican lawmaker John Boehner in the latest effort to broker an agreement -- without which economists say the US economy could be driven back into recession. Republicans, at least publicly, have refused to go along with Obama's call to raise taxes on all US households earning more than $250,000 per year as part of his plan to raise $1.6 trillion in new tax revenues over the next decade. Fawad Razaqzada of FX360.com noted "some optimism about a deal of fiscal cliff talks." Andy Lipow of Lipow Oil Associates meanwhile said the WTI market was also supported by a report that the Seaway pipeline, which transports oil from Cushing, Oklahoma, to Freeport, Texas, "is undergoing a major expansion in early January." "That has the effect of being able to reduce the glut of crude oil that we've seen in Cushing... over the last several months and support the price," he added.