* U.S. budget talks stalled as cliff nears
* U.S. GDP expanded faster than expected in Q3, data shows
* New jobless claims up more than expected last week
* Coming up: U.S. CFTC positions data 3:30 p.m. EST Friday
By Selam Gebrekidan
NEW YORK, Dec 20 U.S. crude oil futures edged higher while Brent futures slid in choppy trading on Thursday as Republicans pushed their budget proposal but indicated their will to work with the Obama administration to resolve the nation's budget crisis.
U.S. crude settled 0.17 percent higher at $90.13 a barrel, after trading between $89.26 to $90.54 a barrel in a thin market.
Brent crude settled slightly lower, however, down 16 cents at $110.20 a barrel. Both crude futures posted a weekly gain.
On Thursday, the U.S. House of Representatives cleared the way for debate and votes on a proposal, dubbed "Plan B," that Republicans are advancing in response to the automatic spending cuts and higher taxes that could hit the economy next year, should Congress and the Obama administration fail to agree on how to deal with the nation's budget deficit.
House Speaker John Boehner said he expects to keep working with President Barack Obama to avert the year-end "fiscal cliff", while advancing his party's proposal, which will raise taxes only on incomes over $1 million.
Favourable economic data from the U.S. Commerce Department also boosted U.S. oil prices, after it showed the nation's Gross Domestic product grew at a 3.1 percent annual rate in the third quarter, compared with expectations for a 2.7 percent rise.
But dampening the good bit of economic news was the increase in U.S. initial claims for unemployment benefits last week, which was slightly larger than economists' projections.
Still, the market was thinly attended on Thursday with many operators already off for the holidays.
"We are not expecting anything substantial on the budget talks today so the long weekend may have started sooner. It looks like everyone took the day off. " said Mark Anderle with Tac Energy in Dallas.
U.S. STOCKS DRAWDOWN SUPPORTS
U.S. heating oil and RBOB gasoline futures led the afternoon rally in the oil futures market, tracing gains made in cash markets in the U.S. Gulf Coast and Chicago.
Heating oil futures settled 0.72 percent higher at $3.0575 a gallon while RBOB gasoline ended up 0.41 percent at 2.7543 a gallon.
Traders were keeping a close eye on delayed restart of a crude unit at Motiva Enterprises Port Arthur, Texas, refinery and maintenance on a gasoline making crude unit at BP Plc's Texas City refinery.
Data from the U.S. Energy Information Administration (EIA) published on Wednesday provided underlying support for heating oil futures after it showed strong demand and lower inventory levels. U.S. distillate stocks fell .09 million barrels to 116.97 million, versus expectations for a 1 million barrel build, according to EIA data.
A bi-monthly report from the EIA showed the world's spare oil production capacity rose slightly over the last two months although stocks were depleted due to a seasonal demand rise.