Crude-oil prices dropped to a more than three-month low in mid-morning Asia trade on Wednesday as Republican nominee Donald Trump showed strength in early results in the U.S. presidential race, sparking jitters across global equities and commodities.

The result of the contest between Democrat Hillary Clinton and Mr. Trump is expected to be called possibly by early afternoon Asia time.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $43.42 a barrel at 0224 GMT, down $1.56 in the Globex electronic session. January Brent crude on London's ICE Futures exchange fell $1.39 to $44.65 a barrel. Oil prices have been volatile as early results trickled in.

Action in commodities will be dictated by the U.S. election results, ANZ Research said.

"If Donald Trump wins, then financial and commodity markets will be very volatile due to fear of the unknown, and I'm sure oil will be no different," said Richard Gorry, director of the Singapore-based energy consultancy JBC Energy.

Many analysts say a Trump victory could see a broad selloff in energy futures as he has touted U.S. fracking as key to the country's energy independence.

On the other hand, some say that if Mrs. Clinton wins, it would set off an initial celebration rally of 2% to 3% in global oil prices because her presidency would represent a continuation of existing U.S. foreign and trade polices, with fewer surprises.

However, the buying spree may be short-lived, given Mrs. Clinton's vocal support for renewable energy.

"In the long run, a Clinton presidency could actually accelerate the takeover of crudeoil by clean energy such as solar and others," said Nelson Wang, a CLSA energy analyst.

Oil prices are also being weighed down by the prospect that the world's crude supply is ballooning, despite pledges by major producers to cut production.

In late September, the 14-member Organization of the Petroleum Exporting Countries reached a tentative pact to limit the group's output to between 32.5 million and 33 million barrels a day. The pact is scheduled to be ratified on Nov. 30 at OPEC's next meeting in Vienna.

According to S&P Global Platts, OPEC has ramped up production to record levels beyond 33.5 million barrels a day.

Moreover, since the September meeting, contention among OPEC members has risen as some producer nations asked to be exempt from the deal. Iraq said it deserves to pump at will as it needs to fund its continuing war against Islamic State.

Russia, the world's largest energy producer and a non-OPEC player, has addedabout 500,000 barrels a day of output in the last two months, according to investment bank Simmons & Co. Intl.

It isn't clear whether Russia would join OPEC's production cut. Market watchers say without Russia's commitment to cut or freeze production, OPEC members would be less inclined to scale back their own.

The rise in global crude production has been pummeling U.S. oil prices, which are down more than 14% in less than three weeks.

Adding to jitters is the continuous growth in U.S. domestic crude stockpiles. According to data from the American Petroleum Institute, U.S. crude stocks grew by 4.4 million barrels in the week ended Nov. 4, extending the uptrend from last week's 14.4 million-barrel expansion.

API data also tip a 3.6-million-barrel decrease in gasoline stocks and a 4.3-million-barrel decline in distillate inventories, according to a market participant.

"In the near term, oil prices will still be mainly driven by rhetoric from OPEC members and the fundamentals of the world's oil supply," said Vyanne Lai, an analyst at National Australia Bank.

Nymex reformulated gasoline blendstock for December?the benchmark gasoline contract?fell 271 points to $1.3421 a gallon, while December diesel traded at $1.4099, 312 points lower.

ICE gasoil for November changed hands at $410.25 a metric ton, down $9.50 from Tuesday's settlement.

Write to Jenny W. Hsu at jenny.hsu@wsj.com

(END) Dow Jones Newswires

November 08, 2016 23:45 ET (04:45 GMT)

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