Oil rises sharply on Biden US election win
LONDON, November 9, 2020 – Oil was up on Monday morning in Asia as the outcome of the US election became clear, with both Brent and WTI futures gaining more than 2%. However, the worsening Covid-19 pandemic and oversupply concerns are still at the forefront of investors’ minds.
Brent oil futures was up 2.64% to $40.49 by 11:51 PM ET (3:51 AM GMT) and WTI futures rose 2.83% to $38.19.
Oil made up some lost ground in Asia trades after a 4% slump in Friday’s session, prices were buoyant on the results of the US election, where the Democrats won the presidency but failed to also take control of the Senate from the Republicans. This gives neither party sufficient power to make radical changes to existing policy and is seen as a moderating influence.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate … The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda,” Michael McCarthy, chief market strategist at CMC Markets in Sydney told Reuters.
President-elect Joe Biden is also regarded as more likely to pursue beneficial federal policies in terms of Covid-19 public health and relief packages, giving some optimism about the speed of a recovery from the still-growing coronavirus epidemic. However, worries over demand recovery remain as the number of global Covid-19 cases exceeded 50 million as of Nov. 9, according to Johns Hopkins University.
Libya’s oil production has now recovered from a months-long embargo to reach 1 million barrels per day, however, the Libyan National Oil Company has stated that it is unlikely to continue production at this level due to obstruction from unnamed entities.
Investors await US crude oil inventory data from both the American Petroleum Institute and the US Energy Information Administration, as well as the OPEC monthly meeting, both due later in the week.
First published on Investing.com