Oil has its price increased and being traded at a two month high expecting the good news from the United States of America, United Arab Emirates and China. The lawmakers in the USA are in the process to resume the budget talks. A terror cell had evolved planning the attacks on the crude-exporter nations and United Arab Emirates came up with news that they have been successful enough to arrest members of the terror cell which was very encouraging for the oil exporters first and then the investors. Moreover, the demand for the oil has also rose in China which is also stimulating the price rise of the oil.

Taking on to the yesterday’s prices, the crude oil futures have been seen rising the most in last five weeks. The administrative authority personals in the United States of America have claimed that they will take some “extraordinary measures” to tackle the fiscal cliff in the country and prevent the tax increases and spending cuts of more than $600 billion which is supposed to start on 1^st January. Besides that, the coordinated effort of the United Arab Emirates and the Saudi Arabian officials arrested the members of a terrorist group which were equipped enough to attack the oil-exporting nations. The budget talks are also on which are basically meant to tackle the worst-case scenarios anticipated due to the unemployment state and the fiscal cliff prolonging in the country.

The non-partisan Congressional Budget Office has said that if the budget plan is not agreed by the stakeholders, USA, also the second largest consumer of the crude oil, is definitely going to suffer a recession even for the first half of the 2013. The issues of the deficit-reduction is on its high for this period of time and the president is almost set to raise the debt ceiling as a part of the deficit-reduction plan. Government is about to create $200 billion in headroom under the debt limit to tackle the deficit which is expected to last for the coming two months.

The release of the Platts data has shown that the oil demand in China has rose by 9.1 percent which is supposed to provide the support to the whole energy complex. The growth being displayed by the Chinese economy is the major reason why investors will get excited about the Chinese support to the oil price.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.