The oil options volatility went up on Monday amid political stalemate in Washington on the budget for 2013, and shows a drop of about 8% for the whole 2012 year, the first year of decline since 2008, according to Bloomberg.
WTI oil price, a reference on the U.S. market, rose by 11 cents in electronic trading session on Monday to $90.91 a barrel. The price rose by 2.4% last week and by 2.2% in December, but lost 1.7% in the fourth quarter and 8% for the full year. Brent oil price, important for the European markets, fell Monday by 22 cents, to $110.4 a barrel, about $2 below the price at the beginning of the year.
Markets eagerly await the U.S. Congress compromise on the “fiscal year” by early next year, when tax increases and public spending cuts totaling $600 billion will take place. Economists believe that automatic austerity measures could lead to a new round of recession in the U.S., according to the Congressional Budget Office.
Negotiations in Congress to avoid this situation have stalled several times in the short period since the re-election of President Barack Obama for a second term.
U.S. House of Representatives and the Senate convened a special session Sunday, after President Obama urged congressional leaders on Friday to try to find a solution. The session ended on Sunday evening but it resumes on Monday. There is still optimism that the lawmakers will reach a last minute deal which will protect tax payers, except the high earners, from a tax increase. President Obama said today at a White House event: “It appears” that a fiscal cliff deal is “within sight”
An index of Chinese manufacturing industry showed economic expansion in December with the highest margin in the last 19 months, boosting markets’ optimism on reviving the Asian growth engine, with a positive impact on energy demand.
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