Oil Near $85, Before U.S. Vote And China Parley
Crude-oil futures rose gently Monday as traders continued to assess energy demand following Hurricane Sandy and anxiously awaited the U.S. presidential election and a meeting of China’s leadership.
Crude for December delivery added 12 cents, or 0.1%, to $84.98 a barrel.
Both the U.S. election on Tuesday and the 18th Communist Party congress in China on Thursday should boost the commodities markets generally, Commerzbank analysts said in a report.
While the commodities markets might favor the reelection of President Barack Obama, “mainly because of his support for [Federal Reserve Chairman] Ben Bernanke” and the Fed’s loose monetary policy, any disappointment if challenger Mitt Romney wins “is likely to be short-lived” as uncertainty would lift and energy use would pick up in the medium term, they said.
And in China, the new leadership should put in place new economic-support measures, lifting commodities prices, the Commerzbank analysts wrote.
The oil market defied a modestly stronger dollar to begin the week. The dollar index which benchmarks the buck against a basket of six rival currencies, drifted higher to stand lately at 80.7.
A stronger greenback makes dollar-denominated commodities more expensive for buyers using other currencies.
On Friday, oil futures fell nearly 3%, bringing the commodity to a third-straight weekly loss, as the dollar strengthened in the wake of better-than-expected U.S. employment data, and as the market fretted about potentially weaker energy demand in the aftermath of Sandy, the deadly hurricane that barreled through the Northeast.
The U.S. government’s efforts to bring additional fuel to the storm-hit East Coast contributed to the weaker energy prices Friday, analysts said.
Also in the energy sector Monday, natural gas for December delivery slipped 2 cents, or 0.5%, to $3.54 per million British thermal units, while December heating oil moved up 1 cent, or 0.27%, to $2.96 a gallon and December gasoline was unchanged at $2.57 a gallon.
Marketwatch
