Although it may seem like nearly everyone in the world is vacationing or enjoying a bit of winter relaxation, such luxury has eluded President Barack Obama, who was forced to shorten his Hawaiian vacation to deal with issues relating to the “fiscal cliff” which is on course for January 1, 2013, when sharp tax increases and spending cuts will be implemented in the United States if things remain unchanged until that point.
Obama is working to promote a bill that will prevent taxes a blanked tax increase, but such a bill will require support from both party leaders, which will not be easy to procure. It is also questionable whether the proposed measure will include the necessary budget cuts that will be required to reduce the nation’s deficit more quickly.
In preparation for Thursday’s budget-centric meetings, oil prices gained 0.7 percent, the first rise in three days, following a drop in the price of US crude stockpiles to a 10-week low. US crude inventories fell by 1.7million barrels (0.5 percent) in the week ending December 21, the lowest since October 12. The country is the world’s biggest oil consumer, and should Obama fail to resolve the fiscal cliff issues, the country will likely be plunged into a recession for at least the first half of 2013, which could wreak havoc on oil prices.