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Oil prices rise as Obama heads back to Washington to resume 'fiscal cliff' negotiations

The price of oil rose Wednesday after President Barack Obama indicated he would cut his Christmas holiday short and head to Washington to try to work out a deal to keep the U.S. from heading over the "fiscal cliff."

Benchmark oil for February delivery rose 40 cents at midday Bangkok time to $89.01 per barrel in electronic trading on the New York Mercantile Exchange.

On Monday, concerns over the stalemate in Washington drove benchmark oil prices lower, with the contract closing down 5 cents at $88.61 a barrel on the Nymex.

Obama was expected to arrive in Washington early Thursday, the White House said, after a brief vacation in Hawaii. Congress was also expected to return to the U.S. capital Thursday and begin budget negotiations.

Hopes that U.S. leaders might reach a budget deal helped buoy oil prices. 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.

In other energy futures trading:

— Brent crude, used to price international varieties of oil, rose 42 cents to $109.22 a barrel.

— Natural gas fell 2.8 cents to $3.318 per 1,000 cubic feet.

— Heating oil rose 1.4 cents to $3.0022 a gallon.

— Wholesale gasoline rose 1.6 cents to $2.75 a gallon.