Oil rallies to 2-month high

Crude prices on Wednesday rallied to the highest levels in more than two months as investors came back to markets after Christmas Day. After two straight days of decline, U.S. crude markets gained due to support at key technical levels. Fears for the looming "fiscal cliff" eased on Wednesday after the White House said President Barack Obama will cut short his family's Christmas vacation in Hawaii and return to Washington on early Thursday. U.S. lawmakers were also scheduled to resume the budget talks on Thursday, working on a last-minute deal to avoid the "fiscal cliff," which could drag the world's largest economy back into recession. Market sentiment was also boosted by more positive signs from the U.S. housing market. According to the latest report released by S&P Dow Jones Indices on Wednesday, its Standard & Poor's/Case- Shiller home prices index for 20 major metropolitan areas, the leading measures of U.S. home prices, rose 4.3 in the 12 months ending in October, showing the most-battered economic sector was on the way to sustained recovery. Oil also got support from the expectations that Japan's new prime minister will pursue more stimulus policies to boost the world's third largest economy. Meanwhile, continuing turmoil in the Middle East bolstered crude prices. Light, sweet crude for February delivery added 2.37 dollars, or 2.67 percent, to settle at 90.98 dollars a barrel on the New York Mercantile Exchange. Brent crude for February delivery also gained sharply by 2.27 dollars, or 2.09 percent, to close at 111.07 dollars a barrel.