Brent steadies around $106; US elections eyed amid demand concerns
By Ramya Venugopal and Rebekah Kebede
SINGAPORE (Reuters) - Brent crude steadied near $106 per barrel on Monday as investors remained on the sidelines a day ahead of U.S. presidential elections, fretting about the economic policies of the candidates and their possible impact on the world's biggest oil consumer.
President Barack Obama and Republican challenger Mitt Romney are locked in a close race, as global markets worry about U.S. budget uncertainty, with looming spending cuts and tax hikes threatening to push the economy back into recession.
The uncertainty comes at a time when crude markets are already weighed down by worries of weak demand, especially in key consumers such as Japan, China and the euro zone, with a ramp-up in production by Saudi Arabia adding to pressure.
"Broadly speaking, we've seen a process over recent weeks now where the oil market is adjusting for the fact that there's plenty of supply around for current demand levels," said CMC markets analyst Ric Spooner.
He added that a key concern over the U.S. election was the possibility of a narrow Obama victory combined with a convincing Republican win in Congress. "(That) would make negotiations over fixing the fiscal cliff (difficult)," he said.
Front-month Brent futures rose 14 cents to $105.82 per barrel at 0248 GMT, while U.S. crude climbed 14 cents to $85 per barrel.
Crude prices fell more than 2 percent on Friday after the U.S. government allowed foreign tankers to bring fuel to the East Coast from other U.S. ports to tide over shortages caused by superstorm Sandy.