View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. News
November 3, 2020

Oil prices ‘extend rally’ ahead of American election

Oil prices have ‘extended their rally’ on the US Election Day due to a recovery in financial markets on 3 November.

By Himaja Ganta

Oil prices have ‘extended their rally’ on the US Election Day due to a recovery in financial markets on 3 November.

However, concerns over surging cases of global Covid-19 infections restricted further gains.

Brent crude futures rose $0.70 to $39.67 a barrel, while US West Texas Intermediate (WTI) futures increased by $0.78 to $37.59, Reuters reported.

On 2 November, both Brent and the WTI benchmarks gained nearly 3%.

Oil brokerage PVM’s Tamas Varga said: “The jump has borne all the hallmarks of a massive, logical and even inevitable short-covering prior to the US presidential elections.

“It would be tempting to conclude that the recovery from last week’s slump is now underway, but it is simply not a plausible scenario.”

Italy is the latest European nation to tighten coronavirus-related restrictions.

The measures implemented in the country include limiting travel between the ‘worst-hit regions’, as well as a nightly curfew.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC), and allies including Russia, together known as OPEC+, is cutting production by about 7.7Mbpd to support prices.

The group intends to ramp up output by 2Mbpd from January next year.

Commerzbank stated: “The hope is now that a continued cut at current levels will be the necessary bridge over the second Covid-19 wave until vaccines are rolled out during [the first half of 2021],” Commerzbank.”

Furthermore, rising Libyan production, which is on course to hit 1Mbpd in the near term, from just 100,000bpd in early September, will also be one of the concerns for OPEC+.

A policy meeting is expected to be scheduled by the OPEC+ over 30 November and 1 December.

Related Companies

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy