Oil prices rose nearly 3% on Wednesday after President Donald Trump falsely claimed victory in a tight US election with millions of votes yet to be counted and the end result is still unclear.
A Trump victory is seen as bullish for oil due to sanctions on Iran and its support for Saudi-led oil production cuts to support prices.
A controversial result and prolonged uncertainty is considered the most bearish result for oil and markets in general, while a Joe Biden victory would be considered bearish to neutral due to his support for green policies and his softer stance on Iran. .
West Texas Intermediate was up 86 cents, or 2.3%, at $ 38.52 a barrel at 1350 GMT.
Brent crude rose 95 cents, or 2.4%, to $ 40.66.
Trump falsely claimed to have won after his Democratic challenger Biden said he was confident of winning a contest that won’t be resolved until a handful of states finish counting votes in the next few hours or days.
“This (potential Trump victory) is optimistic for oil as OPEC + can continue to cut without fear that Iranian oil supplies will return to the market soon,” said Bjarne Schieldrop of SEB.
Investors moved to price in a greater likelihood of US policy stagnation, with US Treasuries and a strengthening dollar and tech stocks on the rise.
Oil prices were also supported by the possibility that OPEC producers and Russia might consider delaying a planned increase in OPEC + oil production from January as a second wave of coronavirus stifles the recovery. of fuel demand.
The Organization of the Petroleum Exporting Countries (OPEC) and its Russian-led allies, a grouping known as OPEC +, previously agreed to ease cuts by 2 million barrels a day from the current 7.7 million bpd in January.
More lockdowns could limit oil price gains. Italy, Norway and Hungary have tightened restrictions on the coronavirus, following Britain, France and other countries.
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