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Oil prices tread higher before US vote

Global oil prices edged higher on Wednesday in cautious deals ahead of a key vote on extending the debt ceiling in the United States, which is the world's biggest crude consuming nation.

Brent North Sea crude for delivery in March gained 21 cents to $112.63 a barrel in London deals.

New York's main contract, light sweet crude for March, won 18 cents to $96.86 per barrel.

"Crude oil prices are on a consolidation mode on Wednesday morning, struggling to find some direction," said analyst Myrto Sokou at brokers Sucden Financial Research.

She added: "It seems that investors would like to remain cautious ahead of the US debt ceiling vote that could set the tone for the following trading sessions.

"The debt limit suspension, which would allow the US government to borrow money until May 19, is due to come to a vote in the Republican-controlled House of Representatives without amendments."

Fears of a political gridlock in Washington over fiscal issues appear to have eased, analysts noted.

Fiscal difficulties are "still there but the risks of falling/jumping off a cliff are much lower than in December", DBS Research said in a market commentary.

"Moreover, Republicans appear to be backing away from a showdown on the debt limit. Increasingly they view the threat of shutting down the government -- unless their spending demands are met -- as counter-productive," it added.

"More and more of the right words are being heard and to the extent markets are rebounding from excessive fiscal fears, this is more soothing music."

Crude futures had risen Tuesday on signs of stronger economic growth in Europe and fresh economic stimulus measures announced by Japan's central bank.

Over the longer term, oil is likely to remain supported by encouraging news from Europe, the US and Japan, analysts said.

A survey published on Tuesday showed that German investor sentiment was at its highest level since the start of the eurozone debt crisis in 2010, as the outlook for Europe's top economy continues to brighten.

The Bank of Japan, under pressure from the country's new Prime Minister Shinzo Abe to devalue the yen, adopted a 2.0 percent inflation target and announced plans to begin open-ended asset purchases next year in a bid to kick-start the struggling economy.