Oil prices rebounded Wednesday as U.S. senate leaders reached agreement on a bipartisan deal to raise the debt ceiling and end a federal government shutdown.

The White House said President Barack Obama supports the deal. The Senate and House of Representatives plan to vote on it later in the day, with lawmakers expressing confidence that it will pass Congress Wednesday, just hours before the country could reach its borrowing authority limit.

The Department of Treasury has made it clear that extraordinary measures will be exhausted by Oct. 17, and that failure to raise the debt ceiling would lead to a catastrophic default.

The deadlock is threatening the U.S. and world economies. Fitch Ratings on Tuesday placed the 'AAA' credit rating of the United States on rating watch negative, saying that delays of lifting the debt ceiling would cause volatility and damage U.S. creditworthiness.

Fitch believed that the debt ceiling will be raised soon, but the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.

Investors are awaiting a last-minute fiscal deal in Washington to break the weeks-long fiscal standoff.

Light, sweet crude for November delivery increased 1.08 U.S. dollars to settle at 102.29 dollars a barrel on the New York Mercantile Exchange, while Brent crude for November delivery gained 90 cents to close at 110.86 dollars a barrel.