Brent crude held over $107 per barrel on Tuesday, as uncertainty ahead of the U.S. elections and renewed worries about Greece and the euro zone crisis headed traders' concerns.
Brent crude [LCOCV1 108.30 0.57 (+0.53%) ] held over $107 per barrel on Tuesday, as uncertainty ahead of the U.S. elections and renewed worries about Greece and the euro zone crisis headed traders' concerns.
President Barack Obama and Republican challenger Mitt Romney were essentially in deadlock on the election eve, polls showed, raising concerns of a cliffhanger delaying the outcome.
News that a deal to keep near-bankrupt Greece afloat may not be reached at a euro zone finance ministers' meeting next week kept concerns about the sluggish global economic recovery hurting oil demand in focus.
Front month Brent futures [CLCV1 86.07 0.42 (+0.49%) ] were down 30 cents at $107.43 per barrel by 0930 GMT.
Brent rallied nearly 2 percent on Monday, driven higher by rising tensions in the Middle East. U.S. crude slipped 1 cent to $85.64 per barrel.
"I definitely think it's a "wait and see" day," said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.
"The outcome of the election (and) the composition of Congress will be very important in the U.S. in terms of its ability to take decisions and action on the fiscal cliff issues," Schieldrop said.
The absence of a decisive win and a clear Congress majority raises the chances of messy negotiations over the "fiscal cliff", nearly $600 billion worth of spending cuts and tax increases that risk pushing the U.S. economy into deep recession, analysts say.
Debt Concerns
Investors were also monitoring the aftermath of superstorm Sandy on the U.S. East Coast and the Greek situation.
"In Europe, there are concerns Greece may not get the funding and the argument that Greece could quit the euro may come back to haunt the risk sentiment of investors," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.
Euro zone debt concerns resurfaced once more after a senior EU official said a deal to keep Greece afloat by providing more bailout money is unlikely to be struck next week when finance ministers from the currency bloc meet in Brussels.
Tens of thousands of Greek workers began a 48-hour walkout, the third major strike in two months against a package of spending cuts and reforms that Prime Minister Antonis Samaras's government is trying to push through parliament to unlock aid.
"Since Greece cannot receive the next tranche from the Troika if the (reform) package is not endorsed, markets could begin to price in renewed political instability and a higher probability of a Greek exit," Bank of America Merrill Lynch analysts said in a report.
Investors are also eyeing data from the American Petroleum Institute, due later on Tuesday, for clues to the impact of superstorm Sandy on oil inventories in the world's top consumer.
U.S. crude inventories are forecast to have risen by 0.9 million barrels in the week to Nov.2, while product stocks fell after disruptions to pipelines, imports and refineries, a preliminary Reuters poll of analysts showed.
