U.S. Oil Fund (NYSEArca: USO) jumped 2.5% in early trading Wednesday following reports that President Barack Obama is cutting his vacation short and returning to Washington to try and cut a deal on the so-called fiscal cliff.
The oil ETF was trading at its highest level in about two months as crude futures traded above $91 a barrel in New York on Wednesday morning.
“Hopes that U.S. leaders might reach a budget deal helped buoy oil prices,” the Associated Press reported. “Failure to agree on a plan before Jan. 1 would lead to spending cuts and tax hikes that economists predict will push the economy back into recession. Otherwise, the economy is expected to show slight improvement in 2013, a positive for energy consumption and prices.”
Obama plans to leave Hawaii and should be back in Washington on Thursday while House and Senate members are also expected to reconvene Thursday, CNN reports.
The oil ETF was down about 15% year to date heading into Wednesday’s rally.
U.S. Oil Fund