Oil prices soar as US picks president

Oil prices gained Tuesday as traders tracked the presidential election in the United States, the world's biggest consumer of crude oil.

New York's main contract, light sweet crude for delivery in December, soared $3.06 from Monday's close, settling at $88.71 a barrel.

In London trade, Brent North Sea crude for December jumped $3.34 to $111.07 a barrel.

The New York oil market traced a solid US stocks rally as Americans went to the polls in a tight race between Democratic President Barack Obama and Republican challenger Mitt Romney.

The West Texas Intermediate (WTI) futures contract surged $3.57 at the peak of intraday trade, to $89.22, before closing at its highest level since October 23. It was the second straight session of gains.

"The firmer tone is confounding given the amount of uncertainty hanging over the markets, with everyone's attention firmly fixated on the US election," said Fawad Razaqzada at GFT.

The analyst said that one factor behind the rally could simply be that WTI prices had fallen too far too quickly.

"Indeed, $85 was a key support level on WTI and a failed break below it yesterday could well have been the trigger behind this short-covering rally," he said.

Commerzbank analysts said the oil market was watching the US vote with bated breath.

"If Obama were to be re-elected, a continuation of the ultra-loose monetary and fiscal policy would become more likely, thus giving buoyancy to oil prices.

"If Romney were to win the election, monetary and fiscal policy would no doubt become less expansionary, causing oil prices to fall," they said.

John Kilduff at Again Capital said there were continued supply concerns after superstorm Sandy battered the US East Coast a week ago, curbing refinery production.

Phillips 66 said Monday that its Bayway Refinery in Linden, New Jersey, would not resume normal operations for up to three weeks due to necessary repairs of storm damage.

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