--Nymex crude oil was recently down $1.99 to $86.72/Bbl
NEW YORK--Crude-oil futures fell Wednesday after the re-election of President Barack Obama sent stock-market futures lower, as investors fear the coming political battle over U.S. budget cuts and tax increases will threaten the economic recovery.
Light, sweet crude oil for December delivery recently traded $1.99, or 2.2%, lower at $86.72 a barrel on the New York Mercantile Exchange. Brent crude oil on the ICE futures exchange fell $1.66 to $109.42 a barrel.
President Obama swept nearly all of the battleground states Tuesday night to clinch another four years in the White House. Investors said the victory only paves the way for a partisan battle over what is known as the fiscal cliff--a series of automatic tax increases and spending cuts--that could weigh on economic growth or even lead to a mild recession.
Dow Jones Industrial Average futures pointed to a lower open, and were recently down 131 point to 13070. Treasury yields fell, while the U.S. dollar and gold posted gains as traders fled to assets seen as performing better in a slowing economy.
"We're going to get more of this "kick the can down the road" sort of thing," said Jason Schenker, president of Prestige Economics. He said that, with Democrats in control of the Senate and Republicans controlling the House, partisan brinkmanship will likely continue.
"Even if Romney had won...you were going to have a split legislature," he said.
Oil prices have been on a steady decline since peaking at $99 a barrel in mid-September. Rising supplies from the U.S. and other regions have met falling demand as the global economy has appeared to weaken.
The U.S. Energy Information Administration is due to report weekly data on U.S. oil and fuel inventories at 10:30 a.m. Wednesday. Analysts believe the data will be volatile due to the impact of Sandy.
The storm knocked out power to millions of homes and businesses in the Northeast U.S. and crippled the region's transportation infrastructure. It also forced refineries and fuel pipelines to close and disrupted overseas energy shipments.
Crude-oil inventories are expected to rise by 1.9 million barrels, according to a Dow Jones Newswires survey. Gasoline inventories are expected to fall by 1.3 million barrels. Stocks of distillates, which include heating oil and diesel fuel, are seen falling 1.4 million barrels.
Denis Gartman, publisher of the Gartman Letter, said he fully expects inventories to be even more volatile than normal for the coming weeks, adding that "those trading predicated upon any of these inventory figures deserve the severe treatment they are likely to receive."
Broader commodity indexes were also lower Wednesday as copper and other industrial metals fell, as did corn and soybeans.
Front-month December reformulated gasoline blendstock, or RBOB, recently traded 6.11 cents, or 2.3%, lower at $2.6378 a gallon. December heating oil recently traded 1.4% lower at $3.0150 a gallon.
--Ben Winkley contributed to this article.
Write to Jerry A. DiColo at jerry.dicolo@dowjones.com.
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