Petróleo Brasileiro S.A. –(NYSE: PBR), or Petrobras, saw more than just a garden variety sell-off on Monday morning. The Brazilian oil giant’s ADSs in New York were down more than 10% ahead of Brazil’s upcoming presidential election, and several issues seemed to be culminating all at once. These issues go above and beyond the Dow Jones Industrial Average having another 100-point plus drop as well.

Weekend polls had Dilma Rousseff in the lead over rival Marina Silva for the upcoming presidential election. Needless to say, Rousseff is considered the socialist and anti-business candidate, but she is also the incumbent.

In addition, Reuters reported that Petrobras’s Pasadena, Texas, refinery had shut down its gasoline producing fluidic catalytic cracking unit for a planned overhaul. The problem with this “planned overhaul” is that the shutdown is expected to last as long as 20 to 25 days before the facility reopens. Still, the initial look showed that the 100,000 barrel per day refinery will now operate at about 90,000 barrels per day.

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A Seeking Alpha report said Petrobras was entering into a perfect storm, with caution being a bit of an understatement. TheStreet had a negative article as well, based on early technical indicators.

Fox News Latino had reports from Brazil’s president regarding Petrobras’s political contributions:

Brazilian President Dilma Rousseff said a story published by the weekly Veja about a staffer on her 2010 campaign soliciting funds from state-controlled oil giant Petrobras to finance her candidacy were unfounded.

Rousseff’s main rivals in the Oct. 5 presidential election, however, labeled the allegations serious and called for an investigation.

Still, just last week Forbes hosted an analyst report indicating that Petrobras shares could double in the next few years.

24/7 Wall St. has recently indicated that Petrobras shares are simply becoming too tied to the upcoming presidential elections in Brazil. Needless to say, the election is still quite divided, and a Rousseff ouster would be considered a very pro-business election result for Brazil.

Petrobras shares were down by 10.8% at $14.67 shortly after the opening bell. Monday should be a volatile day for Petrobras, as this is considered to be a stock that is tied to the election more than it is to its own fundamentals and potential.

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