You are here: Home » International » News » Markets
Business Standard

Oil climbs as US stockpiles shrink, election uncertainty looms over market

West Texas Intermediate was up 71 cents, or 1.9%, at $38.37 a barrel by 0157 GMT, having gained more than $1 earlier in the day

Topics
Crude Oil Prices

Reuters  |  TOKYO 

Crude oil
Representative image

By Aaron Sheldrick

TOKYO (Reuters) - Oil rose nearly 2% early on Wednesday after industry data showed crude inventories in the United States dropped sharply, but analysts said uncertainty had crept into the market amid growing suspense over the result of the U.S. presidential election.

West Texas Intermediate was up 71 cents, or 1.9%, at $38.37 a barrel by 0157 GMT, having gained more than $1 earlier in the day. Brent crude was up 64 cents, or 1.6%, at $40.35.

Oil prices dropped more than 10% last week with rising coronavirus cases around the world and more restrictions on movement hitting demand prospects. U.S. oil has nearly recouped those losses in three days of gains this week in the run-up to the election.

"The risk scenario that the market fears the most is an unclear result so right now, given where the counting is, it's not as clear-cut as it might have been earlier in the morning," said Lachlan Shaw, head of commodity research, at National Australia Bank in Melbourne.

"are reflecting that," he said.

U.S. crude oil stocks fell sharply last week while gasoline inventories rose, data from industry group the American Petroleum Institute showed on Tuesday.

Crude stockpiles fell by 8 million barrels last week to about 487 million barrels, the American Petroleum Institute showed on Tuesday.

That contrasted with analysts' expectations in a Reuters poll for an increase of 890,000 barrels.

More lockdowns could put a cap on oil price gains as Italy, Norway and Hungary tightened COVID-19 restrictions, following the UK, France and other countries.

Supporting prices, OPEC member Algeria backed deferring a planned increase in OPEC+ oil output from January and Russia's energy minister raised the prospect with the country's oil producers.

The Organization of the Petroleum Exporting Countries (OPEC)and allies led by Russia, a grouping known as OPEC+, are set to reduce cuts of 7.7 million barrels per day (bpd) by around 2million bpd from January.

Sources said OPEC and Russia are considering bigger production reductions next year to support prices.

 

 

(Reporting by Aaron Sheldrick; Editing by Sam Holmes and Kenneth Maxwell)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, November 04 2020. 08:19 IST
RECOMMENDED FOR YOU
.