LONDON: Brent crude held around $108 per barrel on Tuesday, as uncertainty ahead of the US 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 were up 35 cents at $108.08 per barrel by 1100 GMT. Brent rallied nearly 2 per cent on Monday, driven higher by rising tensions in the Middle East.
US crude rose 35 cent to $86.00 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 US economy into deep recession, analysts say.
DEBT CONCERNS
Investors were also monitoring the aftermath of superstorm Sandy on the US East Coast and the Greek situation.
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.
“Markets might again be tempted to price in higher odds of a “Grexit”,” analysts from JBC Energy led by David Wech said in a note.
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.
US 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.
