* U.S. Congress passes bill to avert 'fiscal cliff'
* China manufacturing data points to better economic growth
* Coming up: U.S. oil inventory data from API on Thursday
(Updates prices, adds details on U.S. inventories, gasoline)
By Robert Gibbons and Matthew Robinson
NEW YORK, Jan 2 Oil prices rose to 11-week highs
on Wednesday as part of a cross-market rally after the U.S.
Congress approved a deal to avert tax hikes and spending cuts
that threatened economic growth.
U.S. lawmakers on Tuesday approved a deal to prevent huge
mandated tax increases and spending cuts that investors worried
would have pushed the largest oil consumer into recession.
The uncertainty and political brinkmanship had rattled
consumers, businesses and financial markets for weeks. Concerns
a deal to avoid the "fiscal cliff" would not be reached was the
latest economic threat to weigh on oil markets, which were
pressured throughout last year by the euro zone crisis and tepid
The agreement prompted a broad global market rally, boosting
investor appetite for riskier assets and pressuring the dollar
and safe-haven government bonds.
International benchmark Brent crude traded up to $112.90 a
barrel -- highs not seen since Oct. 19 -- before paring gains as
traders assessed possible new headwinds for the U.S. economy.
"There was the fiscal cliff euphoria, but the markets are a
little overdone and people realize you still have the debt
ceiling battle, social security taxes going up and dealing with
spending sequestration and budget cuts," said Mark Waggoner,
president at Excel Futures Inc.
Brent February crude traded up $1.36 to settle at
$112.47 a barrel, off the earlier highs but above the 100-day
moving average of $111.29. After two straight sessions of gains,
the Brent's 14-day moving average hit $109.80 a barrel, and was
close to pushing above the 200-day moving average of $109.82.
U.S. February crude gained $1.30 to settle at $93.12
a barrel, pushing above the 200-day moving average of $91.90 but
off earlier highs of $93.87.
Trading volumes showed signs of rebounding after dropping
off during the late December holiday period, with Brent volumes
slightly above the 30-day moving average, while U.S. crude
volumes were down 11 percent below that level.
U.S. RBOB gasoline futures traded up 1.3 percent,
boosted by news Monroe Energy LLC had taken the gasoline-making
fluid catalytic cracking unit (FCC) offline for 10 to 14 days at
its 185,000-barrel-per-day refinery in Trainer, Pennsylvania,
over the weekend to address issues with the slurry circuit.
The market was also awaiting weekly U.S. oil inventory data,
delayed by the New Year's holiday, for signals on direction.
Reports from the American Petroleum Institute and the U.S.
Energy Information Administration, due out on Thursday and
Friday, respectively, were expected to show builds in refined
product stockpiles and a draw in crude inventories, according to
a Reuters poll of analysts.
Further support for oil came from positive economic data
from the United States and China, the two largest consuming
nations. U.S. manufacturing ended 2012 on an upswing, with
factories returning to growth in December after contracting the
previous month, the Institute for Supply Management said.
China's official manufacturing purchasing managers' index
held steady in December at 50.6, adding to evidence its economy
picked up in the fourth quarter of 2012 after gross domestic
product growth slowed for seven straight quarters.
Traders were watching tensions in the Middle East for signs
of threats to production in the vital area. Iran is carrying out
naval drills in the Strait of Hormuz, the shipping route through
which 40 percent of the world's sea-borne oil exports pass.
Iran has threatened to block Hormuz if the country comes
under military attack over its disputed nuclear program. The
United States has said it would not tolerate any obstruction of
commercial traffic through the strait.
The civil conflict in Syria, sectarian strife in OPEC-member
Iraq and the ongoing tensions between Israel and its neighbors
should remain potential flashpoints in the energy-rich region.
(Reporting by Robert Gibbons and Matthew Robinson in New York,
Christopher Johnson in London and Florence Tan in Singapore;
Editing by Jeffrey Benkoe, Kenneth Barry and Marguerita Choy)