Investors were relieved after US lawmakers approved a deal preventing huge tax hikes and spending cuts that would have pushed the world's largest economy off the "fiscal cliff" into recession and hurt global commodity demand.

Market players were also betting on Malaysia's zero export tax in January to help clear record-high stocks.

"The zero export tax will be long-term positive. But the short-term impact may be neutralised by tighter edible oil import rules by China," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank.

Stricter quality measures set to be enforced by Beijing on Jan. 1 could hurt demand for palm oil.

By the midday break, the benchmark March contract on the Bursa Malaysia Derivatives Exchange had gained 1.6 percent to 2,477 ringgit ($815) per tonne.

Total traded volumes stood at 10,833 lots of 25 tonnes each, thinner than the usual 12,500 lots.

Technicals were bullish as palm oil is expected to revisit its Dec. 31 high of 2,517 ringgit per tonne based on a wave analysis, said Reuters market analyst Wang Tao.

Traders are also looking out for official data on Malaysia's palm oil December inventory level due next week, which is expected to ease slightly from November's record-high 2.56 million tonnes.

But they said the drop could be limited as Malaysian palm exports during December fell as much as 7.9 percent from a month ago, according to cargo surveyor data.

Brent crude rose toward $112 to hit a one-month high on Wednesday as the US Congress approved a deal to avert a fiscal crisis, while promising data from top energy consumer China also supported prices.

Soybean oil markets in the US and China were closed for the New Year holiday.

Center>Copyright Reuters, 2013