Crude Oil prices rose on Wednesday but pared earlier gains after President Donald Trump misleadingly claimed victory in a tight U.S. election with millions of votes still to be reckoned and the final result not yet clear. However, 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.
West Texas Intermediate was up 1%, at USD38.06 a barrel by 1442 GMT Brent crude was up 1.3%, at USD40.22 after hitting highs of USD40.97. 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 probable Trump victory is bullish for oil as OPEC and its allies can keep cutting without fear that Iranian oil supply will come back into the market any time soon. Investors moved to price in a greater chance of U.S. policy stalemate, with U.S. 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 and allies led by Russia, earlier agreed to ease cuts by 2 million barrels per day from the current 7.7 million bpd from January.
Trump declares win, vows court action in knife-edge election
Trump comes into action against 'electoral manipulation', warns of going to court
Nasdaq stock futures witness volatility as it tries to determine the next president.