Oil prices dipped today, giving up some of the gains seen in the wake of US President George W Bush's re-election win, with news of higher weekly US crude inventories weighing on the market.
New York's main contract, light sweet crude for delivery in December, was down 15 cents at $50.73 a barrel. US crude oil futures finished at $50.88 a barrel last night, up $1.26 on the day, after plunging to a low of $48.65 in volatile trading.
In London, Brent North Sea crude for December dropped by 19 cents to $47.37, after surging by $1.01 a day earlier.
World crude oil prices jumped, fell and then soared again yesterday on a market swept by speculation over the implications of Bush's electoral victory.
'A Bush victory in the US presidential election outweighed the earlier bearish data revealing a rise in crude inventories, lifting the price of crude higher for the close,' analysts noted.
The US Energy Department said yesterday that crude oil inventories had climbed by 6.3 million barrels to 289.7 million barrels in the week to October 29. However, distillates - mostly crucial heating oil and diesel - fell for the seventh consecutive week. They dropped 900,000 barrels to 115.7 million, below the average range, as the northern hemisphere winter neared.
The market has been concerned that demand for heating fuel will drive oil prices up, especially if the winter is harsher than expected.
Analysts earlier said the market was betting that a win by Bush would push prices higher because his policies would be likely to further fuel tensions in the oil-rich Middle East.
Losing Democratic challenger John Kerry had been thought more likely to dip into the US Strategic Petroleum Reserve if voted into the White House and would have pursued a stronger fuel efficiency drive.
