November 6, 2012 / 5:30 AM / 5 years ago

UPDATE 9-Oil up with Wall Street as U.S. goes to the polls

* Wall Street jumps; S&P, Dow up more than 1 pct

* S&P GSCI index to raise Brent, lower U.S. crude weighting

* U.S. crude stocks dipped last week - API report

* Coming Up: EIA oil inventory data 10:30 p.m. EST Wednesday (Adds MasterCard, API data paragraphs 17-21)

By Robert Gibbons

NEW YORK, Nov 6 (Reuters) - Oil rose 3 percent on Tuesday, rallying a second straight session and receiving a lift from gains on Wall Street as investors awaited U.S. election results.

U.S. stocks climbed as some investors made bets that Republican challenger Mitt Romney could pull off a victory in the presidential vote, pushing up defense and energy shares.

President Barack Obama and Romney were neck-and-neck as Americans cast votes for president and Congress, polls showed on Tuesday.

"The stock market is up and that's helping crude," said Mark Waggoner, president at Excel Futures Inc.

Analysts and traders agreed that a clear election result, no matter who wins, would end the uncertainty that has buffetted the market.

Oil moved higher ahead of Wall Street's election day gains, attracting bargain hunters after crude futures posted three consecutive weekly losses.

"The market was oversold (last week)," said Christopher Bellew, a broker at Jefferies Bache. "It has been a very long move downwards from $115 down to about $105, so it's quite likely that we are going to continue upwards."

Brent December crude rose $3.34 to settle at $111.07 a barrel, having pushed back above the 100-day moving average of $108.47. Brent jumped nearly 2 percent on Monday, rallying after falling during the session to $104.76, its lowest price since Aug. 1.

U.S. December crude rose $3.06 to settle at $88.71 a barrel. U.S. crude also ended higher on Monday, but only after recovering from an $84.34 session low, the lowest price since July.

U.S. gasoline futures also pushed higher as the effort to restart the New York Harbor energy network after Hurricane Sandy hit a bump on Monday when Phillips 66 said its Bayway refinery in Linden, New Jersey, will take two to three weeks to resume operations.

News on Monday of BP Plc's crude unit overhaul at its Whiting, Indiana, refinery added support for gasoline.

The Whiting news also helped increase Brent's premium to U.S. crude CL-LCO1=R on the expectation it will raise crude oil stockpiles at the Cushing, Oklahoma, delivery hub for the U.S. crude contract.

"The maintenance at the Whiting refinery and the Bayway refinery remaining shut after the storm are helping push RBOB up," said John Kilduff, partner at Again Capital LLC in New York.

The S&P GSCI index, one of two leading commodity indexes for investors, will cut the weighting of U.S. crude oil futures by 6.25 percentage points next year while increasing Brent by 4 percentage points, owner S&P Dow Jones Indices said late on Monday, also lending support to Brent's premium to U.S. crude.

U.S. December RBOB gasoline futures moved up 7.87 cents to settle at $2.6989 a gallon, also a 3 percent jump.

U.S. December heating oil , the benchmark distillate contract, rose 7 cents to settle at $3.0529 a gallon, back above the 200-day moving average of $3.0284.

U.S. retail gasoline demand took a hit as Hurricane Sandy pummelled the Eastern Seaboard. Ga soline demand in the week to Nov. 2 fell 2.4 percent week-over-week and dr opped by th e same amount ver sus yea r ag o, a M as terCard re port said

U.S. OIL INVENTORIES

U.S. crude oil inventories fell 27,000 barrels in the week to Nov. 2, the American Petroleum Institute said in a weekly report released late on Tuesday, against expectations crude stocks would be higher.

Gasoline stocks rose 1.4 million barrels and distillate stocks rose 173,000 barrels, the API said.

Ahead of the report, U.S. crude oil inventories we re f orecaste d to have risen 1.8 million barrels, w hile gasoline and distillate stocks were expected to have dropped, a Reuters survey of analysts showed on Tuesday. [ID : nL1 E8M68O1]

The Energy Information Administration (EIA) will release the government's w eekly oil data at 1 0:3 0 a . m. EST (1 53 0 GMT) on Wednesday.

LOWER NORTH SEA PRODUCTION

North Sea crude oil production that underpins the Brent contract is set to drop 5,000 barrels per day in December from November, loading programs showed on Tuesday.

Turmoil in the Middle East, including fighting in Syria and Iran's dispute with Israel and the West about Tehran's nuclear program, continue to support crude futures, especially Brent, because of Europe's proximity to the region and greater dependence on supply from producers in the area. (Additional reporting by Alice Baghdjian in London and Ramya Venugopal in Singapore; Editing by Peter Galloway and Marguerita Choy and Chizu Nomiyama)

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