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Oil gets boost from US budget talks, hopes for Libya supply

Reuters with CNBC.com
Thursday, 10 Oct 2013 | 2:49 PM ET

Oil prices jumped on Thursday, with U.S. oil settling sharply higher on growing hope for a deal to extend funding of the U.S. government and hopes for supply boosts from Libya and the Middle East.

Oil rose initially on news that Libyan Prime Minister Ali Zeidan was captured and held for several hours by former rebel militia. Later in the morning, a Twitter post commemorating the Yom Kippur war spooked traders, who initially mistook it as news of a serious escalation in Middle East violence.

Libya's oil output has recently recovered to 700,000 barrels per day, after falling at mid-year to its lowest since the country's 2011 civil war after a combination of strikes, militias and political activists blocked the majority of Libya's oilfields and ports in late July.

Brent crude was up nearly $3, trading close to $112 and near its highest in nearly a month. U.S. oil settled up $1.40 at $103.01.

Crude oil inventories up 6.81M barrels
CNBC's Sharon Epperson reports gas inventories are up 149,000 barrels, a much bigger than expected increase.

U.S. House of Representatives Republicans plan to offer President Barack Obama a short-term increase in the federal debt limit if he will agree to negotiate with Republicans on matters including funding to reopen the government, which has remained in partial shutdown since last week.


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