Oil prices rose slightly on Tuesday, the outcome of the US election kept market participants on their toes, as they continued to react to the announcement of the extension of voluntary production cuts by eight OPEC+ members. Brent North Sea crude for January delivery gained 0.60% to $75.53 a barrel. Its US equivalent, a barrel of West Texas Intermediate (WTI) for December delivery, gained 0.73% to 71.99 dollars. “Some players are taking bets on the outcome of the US presidential election”Robert Yawger of Mizuho USA commented to AFP.
US to decide Tuesday Kamala Harris or Donald Trump will enter the White House, at the end of a campaign of unprecedented tension, undecided right up to the last minute. “A Donald Trump victory would be more favorable to the oil industry”Mr. Yawger argued. The Republican candidate defends fossil fuels in particular, and wants a “stricter enforcement of sanctions” against Iran, which could boost prices in the short term, according to Andy Lipow of Lipow Oil Associates. In the longer term, however, a trade war with China, the world’s largest importer of black gold, would be detrimental to oil demand.
Production increase postponed
For Robert Yawger, prices also continued to rise on Tuesday following the decision by eight members of the Opep+ group to postpone by one month “the increase in their production”. These eight countries, including Saudi Arabia and Russia, announced on Sunday that they were postponing until January the gradual lifting of cuts totalling 2.2 million barrels. This is the second postponement, following the first from October to December.
On the demand side, the market is waiting to hear more about China’s new stimulus measures aimed at bolstering the country’s economy. China’s top parliamentary officials have been meeting since Monday to draw up a stimulus plan which, according to analysts, could be further consolidated should Donald Trump win the US presidential election. The attitude “belligerent” recently “adopted” by “Iranians” also pushed up oil prices, according to Mr. Yawger. Iran’s Supreme Leader, Ali Khamenei, vowed on Saturday to retaliate in a way that would “scathing” to any attack by the United States and Israel, which announced it had captured a “high-ranking Hezbollah agent” during an operation by an elite unit in Lebanon.