LONDON--Oil futures ticked lower Wednesday, consolidating after the previous day's sharp gains when Brent touched its highest level in three weeks.
PVM, in a report, said the previous day's rises could be down to expectations of a Barack Obama victory in the U.S. presidential race and the associated relief that his administration's policy of quantitative easing will continue. PVM notes that the price of a barrel of WTI crude, the U.S. benchmark, is some $34 higher than on the day Mr. Obama was first elected.
Mr. Obama's win is widely seen as bullish for oil. JBC Energy, in a note to clients, said the reelected president is more likely to take a tougher stance on energy regulations and licensing and is friendlier towards expansionary monetary policies than the defeated Mitt Romney.
At 1055 GMT, the front-month December Brent contract on London's ICE futures exchange was down 82 cents at $110.25 a barrel.
The front-month December light, sweet crude contract on the New York Mercantile Exchange was trading 70 cents lower at $88.01 a barrel.
Later in the day the U.S. Department of Energy will release its weekly inventory data.
Usually closely-watched for a picture of U.S. fundamentals, opinion is firmly that this week's DOE numbers will hold less worth than usual in the wake of the substantial disruption to refineries, oil terminals and pipelines caused by Hurricane Sandy.
On Tuesday, industry body the American Petroleum Institute issued surprising data of its own, indicating that oil stocks decreased marginally and products stocks grew, despite the shutdown of refineries that meant less crude could be processed.
Denis Gartman, publisher of the Gartman Letter, said he fully expects inventories to be even more volatile than normal for the coming weeks, and said "those trading predicated upon any of these inventory figures deserve the severe treatment they are likely to receive."
The Schork Report said forecasting the numbers "is a coin-flip" and said that the reports are "not worth very much."
Crude-oil inventories likely rose by 1.9 million barrels last week, according to analysts surveyed by Dow Jones Newswires. Prices may edge lower if inventories rise by more than this amount.
The ICE's gasoil contract for November delivery is up $8.50 at $945.50 a metric ton, while Nymex gasoline for December delivery is down 256 points at 2.6733 cents a gallon.
Write to Ben Winkley at ben.winkley@dowjones.com
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