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Oil jumps as US picks a president
Source: Agencies |
November 7, 2012, Wednesday
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THE price of oil jumped the most in a month yesterday as investors, along with voters across the country, awaited the results of the US presidential election.
Benchmark crude rose US$3.06, or 3.5 percent, to finish at US$88.71 per barrel on the New York Mercantile Exchange. Brent crude, which is used to price international varieties of oil, surged US$3.34, or 3.1 percent, to US$111.07 a barrel in London.
But it's still a far cry from the rise in oil the last time US presidential ballots were cast in the midst of the financial crisis. Crude gained more than 10 percent on Nov. 4, 2008, as the Dow Jones industrial average rallied 305 points. On election day in 2000, the most hotly contested election in US history, oil gained a more modest 1.6 percent.
What the market is signaling about the election's outcome is unclear. Analyst Phil Flynn said an Obama administration in favor of tougher regulations could boost oil prices by making it tougher to increase production. But a Republican administration that supports major oil companies could also, in theory, lead to higher prices.
Other factors may have boosted oil yesterday. Traders are still assessing the full impact of Superstorm Sandy on gasoline supplies and fuel demand in the US Northeast. One major refinery owned by Phillips 66 remains offline. And Greece holds a critical vote this week on a new austerity package that will impose further wage and benefit cuts.
In other energy futures trading in New York:
- Wholesale gasoline rose 8 cents to end at US$2.70 a gallon.
- Heating oil rose 7 cents to US$3.05 a gallon.
- Natural gas rose 6 cents US$3.62 per 1,000 cubic feet.
Benchmark crude rose US$3.06, or 3.5 percent, to finish at US$88.71 per barrel on the New York Mercantile Exchange. Brent crude, which is used to price international varieties of oil, surged US$3.34, or 3.1 percent, to US$111.07 a barrel in London.
But it's still a far cry from the rise in oil the last time US presidential ballots were cast in the midst of the financial crisis. Crude gained more than 10 percent on Nov. 4, 2008, as the Dow Jones industrial average rallied 305 points. On election day in 2000, the most hotly contested election in US history, oil gained a more modest 1.6 percent.
What the market is signaling about the election's outcome is unclear. Analyst Phil Flynn said an Obama administration in favor of tougher regulations could boost oil prices by making it tougher to increase production. But a Republican administration that supports major oil companies could also, in theory, lead to higher prices.
Other factors may have boosted oil yesterday. Traders are still assessing the full impact of Superstorm Sandy on gasoline supplies and fuel demand in the US Northeast. One major refinery owned by Phillips 66 remains offline. And Greece holds a critical vote this week on a new austerity package that will impose further wage and benefit cuts.
In other energy futures trading in New York:
- Wholesale gasoline rose 8 cents to end at US$2.70 a gallon.
- Heating oil rose 7 cents to US$3.05 a gallon.
- Natural gas rose 6 cents US$3.62 per 1,000 cubic feet.
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