Oil prices ended little changed on Tuesday as the market waited to find out who voters elected to be the next president of the United States. The most recent polls have put Democrat Hillary Clinton ahead of Republican rival Donald Trump in Tuesday's election. Most investors believe a Clinton victory would result in greater certainty and stability in financial markets.
Brent futures lost 11 cents, or 0.2 percent, to settle at $46.04 a barrel, while US crude rose 9 cents, or 0.2 percent, to settle at $44.98 per barrel. Brent crude's premium to US futures declined to its lowest level in almost five months on Tuesday as the global benchmark weakened relative to the US West Texas Intermediate (WTI) contract due in part to projections of record Opec output.
"Everyone is on hold to see what happens in the election. There was too much uncertainty for the market to develop a clear direction in price," said James Williams, president of energy consultant WTRG Economics in Arkansas, noting the market was also waiting for a couple of inventory reports. At 4:30 p.m. EST (2130GMT) on Tuesday, the American Petroleum Institute (API) will release its data on US oil inventories for the week ended Nov. 4. On Wednesday, the US Energy Information Administration (EIA) will release its weekly petroleum status report at 10:30 a.m. EST.
Analysts said they expected crude stocks to rise 1.3 million barrels, according to a Reuters poll. "Both the election and the inventory numbers should be much clearer Wednesday," Williams at WTRG said. The Organisation of the Petroleum Exporting Countries forecast demand for its oil will rise in the next three years, suggesting its 2014 decision to let prices fall to curb costlier rival supplies is delivering higher market share.
The group meets on Nov. 30 and has pledged to reach a deal on cutting output to try to reduce a two-year-old global surplus. But several member states have asked to be exempt from any deal. Along with questions over the likelihood of non-Opec rival Russia joining in, this has created doubt about Opec's ability to deliver a meaningful cut. Mohammed Barkindo, secretary-general of Opec, warned that failure to implement the agreement reached in Algiers in September to cut output would bring negative consequences to an already fragile oil industry. In the United States, Colonial Pipeline's plan to restore its original gasoline line to service after a leak in September does not yet have federal approval.