Crude prices gained on Monday on the back of hopes that US leaders would agree on a deal to avert the fiscal cliff.

Crude for February delivery gained $1.02 (+1.12%) to $91.82 a barrel on the New York Mercantile Exchange, its highest level since October 18th.

Politicians entered the upper chamber of Congress for eleventh-hour meetings on New Year's Eve, saying that a lot of progress had been made.

Leaders would eventually strike an agreement, though that did not come until the early hours of Tuesday morning; trading on commodities markets was closed for New Year's Day.

Also boosting the outlook for demand on Monday was the HSBC purchasing managers' index (PMI) which showed that the Chinese manufacturing sector accelerated unexpectedly in the month of December, rising to a final reading of 51.5, according to the latest survey data out from Markit.

The above means that activity in the sector accelerated at its fastest pace in 19 months during this past month. The consensus expectation was for a reading of 50.9.

BC

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