Last week began with a steady growth in oil prices ahead of the US presidential elections.
The price of January futures for North Sea Brent crude oil rose by 0.58% to $ 38.16, December WTI crude oil futures rose 0.53% to $ 35.98 per barrel. On Monday morning oil quotes fell within 4%, while the price of Brent crude fell below $ 36 per barrel for the first time since spring. However, oil prices returned to the green zone with the opening of trading in the US. American markets, including commodities, have grown significantly.
The next day, when the whole world was watching the vote in the United States, Algerian Oil Minister Abdelmajid Attar said that Russia, Saudi Arabia and Iraq had offered other countries of the OPEC + alliance to maintain the current level of oil production cuts for the first months of 2021, that is, not to raise production by 1.9 million b / d, as provided by the original plan. According to him, Algeria, together with these countries, is trying to convince the rest of the parties to the agreement to maintain the current level of oil production cuts of 7.7 million b / d in the first months of 2021 in order to avoid a new drop in prices. The renewed agreement to cut oil production OPEC + has been in effect since May this year. The first stage of the deal, when the alliance countries reduced production by 9.7 million b / d, was completed in August. From September until the end of this year, 7.7 million b / d will fall under the reduction. And from January 1, the restrictions should already amount to 5.8 million b / d. In total, the agreement is valid until April 2022, its terms may be revised in December 2021.
On Wednesday oil prices rose within 2% after the release of the data on a noticeable decline in inventories by 8 million barrels in the last week of October. The price of January futures for North Sea Brent crude oil rose by 2.12% to $ 40.55, December futures for WTI crude oil rose 1.94% to $ 38.39 per barrel. In addition, market participants were encouraged by the preliminary results of the vote in the United States and the statements of the incumbent President Donald Trump about leadership in key states even before the end of the vote count. SEB commodity analyst Bjarne Schieldrop told Reuters that Trump's potential victory is optimistic for oil, as OPEC + can cut oil production without fears that Iranian oil will return to the market soon.
The growth continued on Thursday in anticipation of the US vote. The current US President Donald Trump called for a halt in the counting of votes and later said that ballots received by mail after election day would not be counted. For the world's leading players a defeat for Biden is preferable, as he plans to join the Paris climate agreement, soften the US position towards Iran, which will lead to an increase in market supply.
The week ended with a sharp drop due to the concerns over demand for raw materials amid the ongoing coronavirus pandemic. The rise in human infections with the new coronavirus and the threat of re-closure of the economy in several countries have put serious pressure on market sentiment today, as it threatens a recovery in oil demand. The markets were also weighed down by uncertainty about the outcome of the US presidential elections that took place on November 3.
