LONDON (SHARECAST) - Crude oil futures jumped to their highest settlement since the start of May as traders gear up for the US mid-term election results and the Federal Reserve policy statement.
Crude for December delivery settled up 95 cents at $83.90 a barrel on the New York Mercantile Exchange.
Demand for oil was also lifted by the weaker dollar, making it cheaper for holders of other currencies. Meanwhile expectations that the Republicans will win the 39 seats required to take over the House of Representatives also encouraged buyers. Republicans are generally less strict about energy regulation and are largely favoured by businesses.
Traders were also looking ahead to Wednesday’s Department of Energy's weekly report on oil supplies. High levels of inventories have been keeping oil prices from the scorching highs seen among other commodities such as gold, analysts say.
Crude supplies are expected to rise 1.2m barrels for the week ended 29 October. Gasoline stockpiles are forecast to increase 200,000 barrels while distillates, used in heating oil and diesal, are set to fall by around 800,000 barrels.
Gold settled with modest gains on Tuesday as trepidation took hold ahead of the US mid election results and the Fed statement on stimulus.
Gold for December delivery added $2.40 to $1,353.20 an ounce on the Comex division of the New York Mercantile Exchange. Silver bounced back to a 30-year high, rising 28 cents to $24.84 an ounce.
