Oil Prices Steady Amid Anticipation of US Election and Market Uncertainty
Oil prices traded within a narrow range on Tuesday as markets await the outcome of a closely contested US presidential election.
Brent crude futures inched up by 0.2%, reaching $75.24 per barrel, while US West Texas Intermediate crude rose 0.3% to $71.65 per barrel. This follows a 2% price increase on Monday after OPEC+ announced it would delay a planned production increase in December, citing subdued demand and rising non-OPEC oil supplies.
Analysts see the oil market in a holding pattern, with multiple global events this week—including the US election, a Federal Reserve meeting, and China’s National People’s Congress (NPC) meeting—contributing to uncertainty.
“We are now in the calm before the storm,” said Tony Sycamore, an analyst at IG.
Sycamore pointed to traders remaining cautious until these events provide more market direction.
While the OPEC+ decision to delay production increases has offered some price support, other factors are influencing oil supply. In October, overall OPEC production rebounded, driven by Libya’s return to the oil market, while Iraq worked to comply with OPEC+ production cuts. Additionally, Iran recently approved a plan to raise its output by 250,000 barrels per day.
In the US, a tropical storm in the Gulf of Mexico is expected to intensify and could potentially reduce production by 4 million barrels, temporarily impacting supply levels. Meanwhile, preliminary reports suggest US crude stockpiles rose last week, adding to market complexities.
In China, investors are awaiting updates from the NPC meeting, which could include announcements on economic stimulus. However, Yeap Jun Rong, a market strategist at IG, noted that any significant stimulus decisions are unlikely until after the US election results are in, suggesting oil prices may continue to move within a narrow range in the near term.
