Crude retreats after Obama win
BY BARBARA KOLLMEYER, MarketWatch
NEW YORK -- Crude-oil futures fell, tracking losses for assets perceived as riskier assets, after initial relief over news of a second term for President Barack Obama gave way to worries about the so-called fiscal cliff confronting the U.S. government. Crude for December delivery sank $1.53, or 1.7%, to $87.15 a barrel on the New York Mercantile Exchange. The contract had rallied 3.6% on Tuesday.
President Obama won late Tuesday a contentious race against Republican challenger Mitt Romney. Obama's reelection "should be viewed as rather bullish for oil, as in addition to a tougher stance on energy regulations and licensing in the U.S., he is friendlier toward expansionary monetary policies than his opponent," said analysts at JBC Energy in emailed comments.
Stock futures declined before Wednesday's opening bell on Wall Street, while the U.S. dollar strengthened, as investors started worrying about the fiscal cliff -- a combination of tax hikes and spending cuts that will come into effect on Jan. 1 unless politicians reach a budget deal.
Obama will have to work with a divided Congress after Republicans kept control of the House of Representatives, while Democrats retained control of the Senate.
Oil markets were also jittery ahead of U.S. supply data as the Energy Information Administration releases weekly figures on petroleum supplies. Analysts from Platts expect the EIA data to show a 1.7- million-barrel increase in crude-oil supplies for last week.
Late Tuesday, the American Petroleum Institute reported that crude supplies rose 313,000 barrels for the week ended Oct. 19.
In a short-term outlook released Tuesday, the EIA said it expects daily U.S. crude output to average 6.3 million barrels for 2012, which would be 700,000 barrels higher than last year. Projected U.S. crude output would rise to 6.8 million barrels a day in 2013, which would be the highest since 1993.
The EIA also predicted the average price for West Texas Intermediate crude will be $88 a barrel in 2013 and said working natural-gas inventories are at a record level.
Also Wednesday, natural gas for December delivery fell 4 cents, or 1.2%, to $3.57 per million British thermal units. Heating oil for December delivery fell 3 cents, or 1%, to $3.02 a gallon.
Dow Jones Newswires