US election: Oil rises after Trump falsely claims victory in tight polls
A contested result and prolonged uncertainty is seen as the most bearish outcome for oil and markets in general.
Oil prices rose on Wednesday but pared earlier gains after President Donald Trump falsely claimed victory in a tight US election with millions of votes still to be counted and the final result not yet clear.
A victory by Trump is viewed as bullish for oil because of sanctions on Iran and his support for Saudi-led oil production cuts to support prices.
A contested result and prolonged uncertainty is seen as the most bearish outcome for oil and markets in general, while a win for Joe Biden would be seen as bearish to neutral because of his support for green policies and softer stance on Iran.
West Texas Intermediate was up 40 cents, or 1 per cent, at $38.06 a barrel by 1442 GMT. It earlier reached highs of $38.92.
Brent crude was up by 51 cents, or 1.3%, at $40.22 after hitting highs of $40.97.
Trump falsely claimed to have won after his Democratic challenger Biden said he was confident of winning a contest that will not be resolved until a handful of states finish vote counts in the next hours or days.
"This (potential Trump victory) is bullish for oil as OPEC+ can keep cutting without fear that Iranian oil supply will come back into the market any time soon," said Bjarne Schieldrop at SEB.
Investors moved to price in a greater chance of US policy gridlock, with US Treasuries and the dollar strengthening and technology shares soaring.
Oil prices were also supported by the possibility that OPEC producers and Russia could consider deferring a planned increase in OPEC+ oil output from January as a second coronavirus wave stifles a recovery in fuel demand.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a grouping known as OPEC+, earlier agreed to ease cuts by 2 million barrels per day from the current 7.7 million bpd from January.
More lockdowns could cap oil price gains. Italy, Norway and Hungary have tightened coronavirus curbs, following Britain, France and other countries.
Imports will resume automatically after one week. READ MORE
Yemen has been locked in conflict since 2014 when... READ MORE
The fire broke out after an attack by Houthi terrorists on board... READ MORE
Starting Jan. 11, the order will prohibit purchases by US investors... READ MORE
The decision frees up millions of dollars in financing to support the ... READ MORE
'In the days ahead, transition officials will begin meeting with... READ MORE
Several categories of business licences will no more require Emiratis ... READ MORE
Spot gold fell to $1,827.01 an ounce while US gold futures dropped 0.... READ MORE