Oil Rises as "Fiscal Cliff" Talks Resume

NEW YORK (AP) -- The price of oil rose Friday as legislators began post-election talks on how to avoid the so-called fiscal cliff, and a report showed Americans' view of the economy is improving.

Benchmark crude is up 85 cents to $85.94 a barrel in afternoon trading.

President Barack Obama said he invited congressional leaders of both parties to the White House next week to start negotiations on backing away from the "fiscal cliff" of tax increases and automatic spending cuts that would take effect in January. Republicans and Democrats agree that could cripple the economy and reverse the fragile recovery from the Great Recession.

Obama repeated his promise to reject any approach to deficit reduction that doesn't tap the wealthy to pay more in taxes. Republicans still say that raising tax rates on rich Americans is a deal-killer.

Also on Friday the Thomson Reuters/University of Michigan consumer sentiment index showed that Americans feel better about the state of the U.S. economy than at any point in the last five years.

Relief at the pump is helping. The nationwide average for regular gasoline fell to $3.456 a gallon, the lowest since July 21, according to AAA, Wright Express and the Oil Price Information Service.

Brent crude, used to price international varieties of oil, rose $1.69 to $108.94 on the ICE Futures exchange in London.

Among other energy futures on the New York Stock Exchange:

  • Heating oil rose 4 cents to $3 a gallon.
  • Wholesale gasoline rose 8 cents to $2.69 a gallon.
  • Natural gas slipped 11 cents to $3.63 per 1,000 cubic feet.

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