Oil Holds Gains as Traders Gird for US Vote, Hurricane Rafael
Oil was steady after a five-day run of gains as the market monitored a tight US presidential election and Hurricane Rafael menaced production in the Gulf of Mexico.
West Texas Intermediate traded near $72 a barrel after rising 0.7% on Tuesday, with Brent crude closing below $76. Rafael is threatening about 1.7 million barrels a day of output in the US gulf, and Chevron Corp. has shut some oil and gas facilities in the area.
Early results are beginning to be tallied in the US presidential election, although the final outcome in the race between Kamala Harris and Donald Trump could take days. Curbs on Russian oil exports could be eased if Trump wins, while there might be tighter sanctions on Iranian flows, according to RBC Capital Markets LLC.
The US crude benchmark has rallied around 7% over the past five sessions — paring a sharp slump over the previous few weeks — as Iran escalated its rhetoric against Israel and the OPEC+ alliance pushed back a plan to start restoring barrels to the market for a second time. Some traders are hedging against $100 a barrel oil if hostilities in the Middle East ratchet up after the US election.
“US foreign policy is shaping up to be a potential factor for oil markets in the near term” over Iran, said Vivek Dhar, an analyst at Commonwealth Bank of Australia. Also, “markets now must consider whether OPEC+ will perennially be forced to push their decision to reverse their voluntary oil production cuts,” he said.
WTI for December delivery was steady at $71.99 a barrel as of 8:36 a.m. in Singapore. Brent for January settlement closed 0.6% higher at $75.53 a barrel on Tuesday.
Source : Bloomberg
