Crude rallied in the early session and tested 5096 level but fell as pressure seen from international where crude oil fell below $93 a barrel after rising to the highest in more than three months as the U.S. Congress approved a deal to prevent tax hikes and spending cuts that had threatened economic growth. Congress decided to raise taxes on wealthy individuals and families, sparing middle- and low-income earners. But it left unresolved another sticky issue involving $109 billion in planned military and domestic spending cuts, promising more political showdowns on the budget in coming months. China's official manufacturing PMI held steady in December at 50.6, adding to evidence that its economy had picked up in the last three months of 2012 after slowing for seven straight quarters. Other positive sentiment came from Wednesday's data showing a rebound in U.S. manufacturing activity in December. Tensions in the Middle East helped crude prices too. Fourth largest oil exporter Iran was carrying out naval drills in the Strait of Hormuz, a waterway Tehran has threatened to block if it comes under military attack over its disputed nuclear program. Some 40 percent of the world's sea-borne oil exports pass the strait. While investors continued to go long on the growth-sensitive commodity amid sentiments that while fiscal uncertainty remains in the form of longer-term deficit reforms, the U.S. will avoid recession and roiling markets. Now technically market is getting support at 5023 and below could see a test of 4996 level, And resistance is now likely to be seen at 5086, a move above could see prices testing 5122.

Trading Ideas:

Crude trading range for the day is 4996-5122.

Crude gained after U.S. Congress approved a deal that many feared would depress economic growth and demand for oil.

Oil market was well supplied and global inventory levels were high as U.S. oil production increases .

Oil prices also received support from Chinese data pointing to improving economic activity.