Brent crude oil traded just above $108 on Monday morning, responding to positive data from China and renewed hope that U.S. lawmakers would come to an agreement to reduce the country's deficit before the looming ‘fiscal cliff'. The commodity traded at 108.21.

The US ‘fiscal cliff' has weighed on Brent prices as many worried that the stalemate between Democrats and Republicans would carry on past the January 1 deadline. The ‘fiscal cliff', a package of tax increases and spending cuts, has been forecast to send the country into a recession if not dealt with. So far, lawmakers have yet to reach an agreement; but a new development over the weekend seems to suggest they are moving closer to a compromise.

Speaker of the house John Boehner has accepted a tax increase for the wealthy, originally a sticking point in negotiations, in exchange for massive cuts to entitlement programs. According to CNBC, President Obama is open to the proposal but hasn't yet accepted.

This news coupled with promising manufacturing data from China has many believing that future demand for crude oil will grow rather than contract.

On the supply side, geopolitical risks remain the largest influence over prices. Bloomberg reported that violence continued over the weekend in Syria as eight civilians were reported dead after a bombing in Damascus. Uprisings in the region have threatened to spread to neighboring countries and in turn cause interruptions in supply.

Iran has seen its revenues halved after the West enacted tough sanctions on the nation in an effort to cut funding for its nuclear development program. So far, the sanctions have done little to slow the country's nuclear research.

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