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Oil prices fall 2 percent as U.S. election looks tight

Thursday, November 17, 2016, 17:11 GMT+7

Oil prices turned lower on Wednesday as early counting showed Republican Donald Trump and Democrat Hillary Clinton waging a close battle in several crucial battleground states in the U.S. presidential election.

With traders glued to their screens, Brent crude futures LCOc1 only started trading shortly before 0100 GMT, highly unusual for the international oil benchmark.

After seesawing early, Brent prices were trading down over 2 percent from their last settlement, at $45.11 per barrel at 0231 GMT.

U.S. West Texas Intermediate (WTI) crude oil futures fell 2.6 percent to $43.82 per barrel.

Trump held slight leads in the vital battleground states of Florida, Virginia and Ohio on Tuesday, clinging to a narrow advantage over Clinton in key states that could decide their race for the White House.

"Volumes are eerily low... this morning, which means a lot of investors are still sitting on the side lines waiting for further confirmation of the outcome of the U.S. election," said Gary Huxtable, client advisor at Atlantic Pacific Securities.

"The main show today will be the U.S. presidential election results coming in over the Asia morning," said Jeffrey Halley, senior market analyst at OANDA brokerage in Singapore, although he added that a report by the American Petroleum Institute (API) showing crude inventory figures rising by 4.4 million barrel was weighing on markets.

"Action today will be dictated by results from the U.S. election," said ANZ bank in a note.

In Asian oil markets, analysts were still musing over mixed oil data coming out of China on Tuesday, which showed a fall in crude imports and a rise in exports of refined products like diesel or gasoline.

"Crude oil net imports fell to just 6.8 million barrels per day (bpd) in October, down from 8.1 million bpd the previous month. Although this is a very large drop, to the lowest monthly import level since January 2016, it is still up 8 percent year-on-year," Barclays bank said in a note.

Barclays said that the monthly decline was likely a result of falling government strategic stockpiling as prices in October were higher than now, making such purchases less attractive.

"Some (independent) 'teapot' refineries are also thought to have used up their crude oil import quotas for the year, and that may also be having a negative effect on crude oil import demand at the margin," the bank said.


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