Benchmark oil up US$1.40 to US$103.01/barrel; Brent rises US$2.74 to US$111.80/barrel; wholesale gasoline rises 7 cents to US$2.70/gallon; natural gas rises 4 cents to US$3.72/mcf

Allison Oesterle

NEW YORK , October 10, 2013 (Associated Press) – Oil jumps above $103 on hopes of debt-ceiling deal to avoid US default; natural gas soars Oil prices jumped above $103 a barrel on Thursday on hopes that U.S. political leaders are near a deal to raise the debt ceiling.

Meanwhile, natural gas rose to a three-week high on the prospects of cooler temperatures in the Midwest. And the average price for gasoline in the U.S. remained at $3.35 a gallon.

Benchmark oil for November delivery rose $1.40, or 1.4 percent, to close at $103.01 a barrel, reversing much of Wednesday's decline of $1.88 a barrel.

Facing a fresh deadline, House Speaker John Boehner said Thursday that Republicans would vote to extend the government's ability to borrow money for six weeks — but only if President Barack Obama first agrees to fresh negotiations on spending cuts. Under the Republican plan, the partial government shutdown would continue in the meantime.

Meanwhile, developments in Libya reminded markets of the risk to supplies from key crude producers in the region. Libyan Prime Minister Ali Zidan was abducted by gunmen from the hotel where he resides, but freed hours later. The event gave an extra boost to Brent, the benchmark for international crudes. Brent rose $2.74, or 2.5 percent, to $111.80 a barrel on the ICE Futures exchange in London.

Natural gas gained 4 cents to $3.72 per 1,000 cubic feet, the highest price since Sept. 19. Forecasts now call for cooler than expected temperatures across a broad region of the middle of the U.S.

At the pump, the average price for a gallon of gasoline has been stuck at $3.35 for the past week. Still, the price is 21 cents less than a month ago and 46 cents cheaper than at this time last year.

In other energy futures trading on Nymex:

— Wholesale gasoline jumped 7 cents to $2.70 per gallon.

— Heating oil added 5 cents to $3.07 per gallon.

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Pablo Gorondi in Budapest and Pamela Sampson in Bangkok and Esam Mohammed in Tripoli, Libya, contributed to this report.