But despite that progress, President Barack Obama and House Speaker John Boehner are both still playing political hardball. On Tuesday morning, Boehner said he is readying a backup bill aimed at averting the "fiscal cliff" because the president has yet to offer a balanced package of revenues and spending cuts that would reduce burgeoning federal deficits.
The move is an attempt to give Republicans political cover if Washington fails to reach a deal. Many economists believe that a lack of action by the government could steer the country back into a recession, which would dampen the demand for energy.
Benchmark crude finished up 73 cents at $87.93 on the New York Mercantile Exchange.
Brent crude, which is used to price international varieties of oil, rose $1.14 to $108.78 on the ICE Futures Exchange in London.
Prices at the pump hit a new low for the year just under $3.24 a gallon.
Other futures on the New York Mercantile Exchange:
Heating oil rose 4 cents to $3 a gallon.
Natural gas gained 6 cents to $3.42 per 1,000 cubic feet.
Wholesale gasoline added 4 cents to $2.69 a gallon.