Oil rises on hopes of avoiding 'fiscal cliff'

Negotiations still have a long way to go before a budget deal is reached. Treasury Secretary Timothy Geithner met with congressional leaders Thursday, a day after President Barack Obama and Republican House Speaker John Boehner said that talks are progressing, but complained that Democrats have yet to offer spending cuts.

If no deal is reached, a series of tax increases and spending cuts will start in January.

Benchmark crude rose $1.51 to $88 per barrel in midday trading in New York.

Also Thursday, the Commerce Department raised its estimate for U.S. economic growth. And in another encouraging sign The National Association of Realtors said its seasonally adjusted pending home sales index rose in October to its highest level in nearly six years.