Oil prices gain 3 percent as elections, hurricane, and China push prices up

After three weeks of losses, cheap crude attracted buyers, raising oil prices for the second straight day. The elections, hurricane Sandy, and China's 18th Party Congress also helped push oil prices up.

Eric Gay/AP/File
This May file photo shows a drilling rig near Kennedy, Texas. Crude prices continued to feel the aftermath of hurricane Sandy, The longer East Coast refineries are closed and gasoline supplies are restricted, the more .

Oil prices jumped more than 3 percent Tuesday as Americans flocked to voting booths – and the volatility looks to go on for some time.

The US election will give traders some idea, not only of who will occupy the White House for the next four years, but also the balance of power in Congress as the clock ticks down to the fiscal "cliff" and other pressing economic issues.

"The outcome of the election [and] the composition of Congress will be very important in the US in terms of its ability to take decisions and action on the fiscal cliff issues," Bjarne Schieldrop, chief commodity analyst at SEB in Oslo, told Reuters.

There were other factors that helped push up oil prices. After three weeks of losses, crude was due for a bounce, which began Monday and carried into Tuesday.

Brent crude jumped nearly 3 percent to reach at $110.95 for December contracts. West Texas Intermediate crude advanced just over 3 percent to $88.27.

The aftermath of hurricane Sandy, which has closed East Coast refineries and restricted gasoline supplies, also helped push up prices amid predictions that supply would continue to remain tight.

The election will likely generate volatility in oil prices as traders attempt to project longer-term energy policy initiatives from the results, The Wall Street Journal reported, citing Jim Ritterbusch, president of Ritterbusch & Associates. 

Investors also kept close watch on developments abroad. China's 18th Party Congress, which has broad implications for the future of the world's second-largest economy, gets under way Thursday. Signs that China's economy is recovering are bullish for oil prices.

In Greece, an austerity bill vote Wednesday and weekend budget talks loom near on the horizon.

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