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Oil prices extend rally ahead of U.S. election

CoronavirusNov 03, 2020 04:10AM ET
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© Reuters. File photo of a worker walking past a pump jack on an oil field owned by Bashneft, Bashkortostan

By Ahmad Ghaddar

LONDON (Reuters) - Oil prices extended their rally on U.S. Election Day amid a recovery in financial markets on Tuesday, but concerns over surging coronavirus cases around the world capped further gains.

Brent crude (LCOc1) futures rose 70 cents, or 1.8% to $39.67 a barrel at 0845 GMT, while U.S. West Texas Intermediate (WTI) crude (CLc1) futures were up 78 cents, or 2.1%, to $37.59 a barrel. Both benchmarks gained nearly 3% on Monday.

"The jump has borne all the hallmarks of a massive, logical and even inevitable short-covering prior to the U.S. presidential elections," Tamas Varga of oil brokerage PVM said.

"It would be tempting to conclude that the recovery from last week's slump is now under way, but it is simply not a plausible scenario," he added.

Italy is the latest country in Europe to tighten COVID-19 restrictions, including limiting travel between the worst-hit regions and imposing a nightly curfew, which will limit fuel demand.

Benchmark prices, down sharply over the past week, had a brief reprieve on Monday after Russia's oil minister held talks with domestic oil companies on a possible extension of oil output restrictions into the first quarter of 2021.

The Organization of the Petroleum Exporting Countries and allies including Russia, a group called OPEC+, slashed oil output from May to support prices and tapered the cut to 7.7 million barrels per day (bpd) in August. They are due to taper the cuts off by 2 million bpd in January.

"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 (DE:CBKG).

Rising production from Libya which is on course to hit 1 million bpd in the coming weeks, from just 100,000 bpd in early September, will also be a concern for OPEC+.

OPEC+ holds its next full meetings on Nov. 30 and Dec. 1.

Oil prices extend rally ahead of U.S. election
 

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Comments (8)
David Bennett
David Bennett Nov 03, 2020 10:05AM ET
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rigs down, production down more drawdowns in the US to come thru the end of the years and the decline curve sets in.
Drew Washington
Drew Washington Nov 03, 2020 5:13AM ET
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News is always hindsight. No real explanqtion.
perplexed76 .
perplexed76 . Nov 03, 2020 4:29AM ET
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Cushing is top full. Oil guys want to be dipped in negative zone once again.
Calvin Sky
Calvin Sky Nov 03, 2020 1:14AM ET
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never seen an article postive on oils from reuters. go figure !
TL Chan
TL Chan Nov 03, 2020 1:01AM ET
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The author changed the small title on the news roll, but forgot to change the title here! My god!
eric helzer
eric helzer Nov 02, 2020 11:48PM ET
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I never see articles on here talking about when oil goes up. Went up $4 today this article says oil falls, because it went down 6 cents....lol..
Jim Horn
Jim Horn Nov 02, 2020 11:48PM ET
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I was just thinking the same thing..lol it's up a few pennies now
TL Chan
TL Chan Nov 02, 2020 11:13PM ET
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Really fake news, fabricated news for fund house narrative drive! Just near last US Stock Market close, Crude future risen 3.7% to $36.7, now this Reuters call it a drop! The fund house has too much money to pay the media. American is really being dragged down by media and the corruption gang!
BOB MM
BOB MM Nov 02, 2020 10:50PM ET
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WTI rally from $33 to $37 in one day and you call this "Oil falls"??? lmao, the editors of this website really need lean some basic math first before they write article
Plopseven Schwartz
Plopseven Schwartz Nov 02, 2020 10:50PM ET
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Don’t 90% of Exxon rigs need oil above $40 to be profitable though?
perplexed76 .
perplexed76 . Nov 02, 2020 10:50PM ET
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Plopseven Schwartz  this info from the guys who never seen oil live or use it.
 
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