Oil rose to the highest level in more than 10 weeks in New York after U.S. lawmakers reached a deal to avert automatic tax increases and spending cuts that threatened growth in the world’s biggest economy.

Futures increased as much as 1.1 percent after legislation to avoid the so-called fiscal cliff was passed by a vote of 257-167 in the House after Republicans abandoned an effort to add spending cuts to the Senate’s plan. A government gauge of China ’s manufacturing showed a third month of expansion yesterday, a sign that the recovery in the world’s second- biggest oil consumer will extend to this year.

“The compromise reached on the fiscal cliff means that the U.S. economic recovery can continue unimpeded,” said Christopher Bellew , a senior broker at Jefferies Bache Ltd. in London, who predicts oil will remain near current levels this month. “Unemployment will continue to shrink in the U.S. and the housing market to recover.”

West Texas Intermediate for February delivery rose as much as $1.03 to $92.85 a barrel in electronic trading on the New York Mercantile Exchange , the highest since Oct. 19. It was at $92.75 at 8:58 a.m. in London. WTI dropped 7.1 percent last year, the first drop since 2008. Trading was closed yesterday for the New Year holiday.

Brent for February settlement rose 79 cents, or 0.7 percent, to $111.90 a barrel on the London-based ICE Futures Europe exchange. The North Sea grade advanced 3.5 percent in 2012, a fourth annual gain.