UPDATE 8- Crude futures end mixed as budget deal stalls

Selam Gebrekidan
Reuters Middle East

* 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

NEW YORK, Dec 20 (Reuters) - 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


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. 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


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.

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