Crude Oil Trades Near $45 as Americans Cast Votes for President

(Bloomberg) -- Oil closed near $45 a barrel in New York as Americans voted in the presidential election, with opinion polls showing Hillary Clinton ahead of Donald Trump.

Futures rose 0.2 percent, following a 1.9 percent gain on Monday after the FBI reiterated that Clinton's handling of e-mails wasn't a crime. OPEC Secretary-General Mohammed Barkindo warned of prolonged instability in the oil market if the group and other major suppliers fail to act jointly to limit output and curb a global glut. U.S. supplies grew 2 million barrels last week, according to a Bloomberg survey before government data Wednesday. The industry-funded American Petroleum Institute was said to report a stockpile gain Tuesday.

Oil has been stuck around $45 a barrel following the Organization of Petroleum Exporting Countries' failure to agree on output quotas for member countries on Oct. 28. The group must reach a consensus before finalizing its September deal to cut production at a Nov. 30 meeting in Vienna. Russia is “on board” with an agreement to limit crude production to help re-balance the market, according to Barkindo.

“A Clinton victory should be neutral to a bit positive for the market,” said Mark Watkins, the Park City, Utah-based regional investment manager for the Private Client Group at U.S. Bank, which oversees $136 billion in assets. “OPEC appears to be putting in the ground work for an agreement. At the Nov. 30 meeting we have to see that they've made progress, meaningful progress, and something is coming to fruition to support the market.”

West Texas Intermediate for December delivery rose 9 cents to close at $44.98 a barrel on the New York Mercantile Exchange. The contract increased 82 cents to $44.89 on Monday, the biggest gain since Oct. 19. Total volume traded was 24 percent below the 100-day average.

Futures were little changed from the settlement after the API was said to report U.S. crude supplies rose by 4.4 million barrels last week. December WTI traded at $44.88 at 4:37 p.m. in New York.

Brent for January settlement declined 11 cents to $46.04 a barrel on the London-based ICE Futures Europe exchange. The global benchmark closed at a 43-cent premium to WTI for January delivery.

Record Increase

U.S. crude stockpiles rose by a 14.4 million barrels in the week ended Oct. 28, the most ever in weekly Energy Information Administration data. The industry-funded American Petroleum Institute is scheduled to release it's weekly stockpile data Tuesday.

“Some people are on the sidelines because there's still questions about the election,” said Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut. “Supply and demand are the major movers and neither candidate would make an impact on them in the short term. We should head lower once the vote's over because of the realization that there's more than ample supply.”

World oil demand will average 96.92 million barrels a day in 2017, a 250,000 barrel gain from October, the EIA said in its monthly Short-Term Energy Outlook released Tuesday. Global production will average 97.43 million barrels a day in 2017, up 420,000 barrels from October. That will leave an excess of 510,000 barrels a day next year, wider than the 340,000 surplus estimated last month

Oil-market news:

• Iranian Oil Minister Bijan Namdar Zanganeh said that he's “not very pessimistic” about OPEC's ability to reach an agreement, and that Nov. 30 isn't a deadline for the organization to conclude a deal.
• Oil demand will reach 95.3 million barrels a day in 2017, according to OPEC's annual World Oil Outlook report released Tuesday. That's an increase of 300,000 barrels a day from last year's forecast.
• From Eni SpA to BP Plc, the biggest international oil companies are reining in capital spending for 2017 and possibly longer as they try to squeeze profits from a crude market battered by a global glut.
• China's crude imports in October fell almost 16 percent from a record the previous month to 6.81 million barrels a day, the lowest since January.
• Traders have bought and sold an average of almost 1.1 billion barrels of WTI futures a day in 2016, a surge of 35 percent from a year earlier. By comparison, ICE Futures Europe's Brent contract climbed by 13 percent.

--With assistance from Grant Smith To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net. To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Carlos Caminada, Jim Efstathiou Jr.