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In a swell of investor risk appetite, U.S. stocks racked up
their biggest one-day gain since March on Monday, but this
boost, which lifted oil, copper and European equities earlier on
Tuesday faded.
The most recent polls have put Democrat Hillary Clinton ahead of
Republican rival Donald Trump in Tuesday's election. Clinton is
seen by investors as offering greater certainty and stability.
Brent January crude oil futures were down 19 cents at $45.96 a
barrel by 1308 GMT, off a session peak of $46.69, while U.S.
West Texas Intermediate (WTI) crude futures fell 22 cents to
$44.67, after the U.S. dollar pared losses and S&P futures
turned negative.
"Seeing oil coming off today, that's more reflective of the
equity futures in the U.S. coming off the highs and European
stocks coming off," CMC Markets analyst Jasper Lawler said.
The Organization 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. [OPEC/M]
"OPEC raising its forecasts, ordinarily a positive, but we're
all obviously election-focussed ... so I don’t think that's
driving (oil) as much as it normally would," Lawler said.
The group meets on Nov. 30 and has pledged to reach a deal on
cutting output to try to erode a two-year-old global surplus.
But a series of member states asking to be exempt from any deal,
along with questions over the likelihood of non-OPEC rival
Russia joining in, have created doubt over OPEC's ability to
deliver a meaningful cut.
"The emerging sense of disappointment surrounding the OPEC
meeting in three weeks’ time is likely to prompt further
financial investors to jettison their long positions, too,"
Commerzbank said in a note.
In China, oil data released on Tuesday was weak, albeit coming
down from high levels.
In physical oil markets, U.S. pipeline companies with operations
at the heart of the country's commercial oil industry at
Cushing, Oklahoma, restarted on Monday after an earthquake
triggered safety shutdowns.
(Additional reporting by Henning Gloystein in SINGAPORE; Editing
by Alexander Smith and David Evans)
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