LONDON: Oil prices traded in a narrow range on Tuesday ahead of what is expected to be an exceptionally close U.S. presidential election, after rising more than 2% in the previous session as OPEC+ delayed plans to hike production in December.
Brent crude futures were up 45 cents, or 0.6%, to $75.53 a barrel by 1226 GMT, while U.S. West Texas Intermediate crude was at $71.94 a barrel, up 47 cents, or 0.7%.
“The fate of this election is important for the oil market, since a Donald Trump victory could have major consequences for international trade, geopolitical relations, U.S. energy policy and international climate policy,” analysts at France’s Engie Group said.
Oil prices had been supported by Sunday’s announcement from the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, to push back a production hike by a month from December as weak demand and rising non-OPEC supply depress markets.
Still, risk-taking remains limited with a busy week - including the U.S. election, the Federal Reserve’s policy meeting, and China’s National People’s Congress (NPC) meeting - keeping many traders on the sidelines, said Yeap Jun Rong, market strategist at IG.
Oil jumps nearly 3pc after OPEC+ delays output hike
For now, polls suggest the U.S. presidential race will be closely contested, and any delay in election results or even disputes could pose near-term risks for broader markets or drag on them for longer, added Yeap.
“Eyes are also on China’s NPC meeting for any clarity on fiscal stimulus to uplift the country’s demand outlook, but we are unlikely to see any strong commitment before the U.S. presidential results, and that will continue to keep oil prices in a near-term waiting game,” Yeap said.
Meanwhile, OPEC oil output rebounded in October as Libya resumed output, a Reuters survey found, although a further Iraqi effort to meet its cuts pledged to the wider OPEC+ alliance limited the gain.
Iran also plans to increase output by 250,000 barrels per day, the oil ministry’s news site said on Monday.
In the U.S., a storm predicted to intensify into a hurricane in the Gulf of Mexico this week could reduce oil production by about 4 million barrels, researchers said.
Ahead of U.S. weekly oil data on Wednesday, a preliminary Reuters poll showed on Monday that U.S. crude stockpiles likely rose last week, while distillate and gasoline inventories fell.
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