Weak Dollar Boosts Oil As America Votes For Next U.S. President

Prices could spike depending on who is elected: File Image/Pixabay

As of 1815 GMT while Americans headed to the voting polls to decide who their next president would be, oil prices on Tuesday edged up about 1 percent.

Brent rose 35 cents to $75.43 per barrel, while West Texas Intermediate rose 37 cents to $71.84.

Tamas Varga, an analyst at PVM, said in addition to the Organization of the Petroleum Exporting Countries (OPEC) earlier deciding to delay its output cut of 2.2 million barrels per day (bpd) for another month in December, "Brewing Middle East tension and the weaker [U.S.] dollar also played their parts in sending oil ... higher."

Yeap Jun Rong, market strategist at IG International, said many traders are analyzing what is shaping up to be a busy week, including - in addition to the elections - the U.S. Federal Reserve's policy meeting and a meeting of China's National People's Congress.

He remarked, "Eyes are on China's NPC meeting for any clarity on fiscal stimulus to uplift the country's demand outlook, but we are unlikely to see any strong commitment before the U.S. presidential results, and that will continue to keep oil prices in a near-term waiting game."

Meanwhile, Bloomberg noted that "The fourth quarter has begun with some of the biggest swings in oil-options markets in years: there remains uncertainty about what the period between the Nov. 5 U.S. election and the presidential inauguration in January will mean for the continued tension in key oil-producing regions of the Middle East; Iran is planning a complex counterattack on Israel involving powerful warheads and other weapons."

Bloomberg calculated that December call options equal to over 10 million barrels of WTI changed hands in a popular $90/$100 spread trade late on Monday.

In other oil news on Tuesday, a survey by The Wall Street Journal suggested that U.S. crude inventories were likely unchanged last week at 425.5 million barrels, while decreases of about 300,000 barrels were expected in distillate stocks and 900,000 barrels in gasoline stocks.

Final data from the Energy Information Administration is scheduled for release Wednesday.