- The black gold rallies back as investors bank on OPEC delaying the taper.
- COVID-19 and the US elections remain the key drivers.
The price of WTI is bid despite the demand side risk of yet another lockdown in Europe as prospects of OPEC kick in.
At the time of writing, WTI is trading at $36.91 and has travelled between a low of $33.67 and a high of $37.08.
Crude oil prices had been heavily on the back foot yet considering yet another European region locked down, with England joining other Western European nations in imposing mobility controls to combat the contagion.
The market had also to contend with Libyan production coming back online and no confirmations from OPEC+ of any planned tapering.
Meanwhile, policy uncertainty is also weighing on prices ahead of the US election, considering its potential implications on global oil supply.
However, oil futures at the start of this week posted their first gain in four sessions on the expectations that OPEC+ will postpone plans to curb production cuts.
US presidential elections are also a feature in the market as the anticipation of a Blue wave supports the demand side in the longer run.
OPEC+ had planned to reduce its production cut targets from 7.7 million barrels a day to about 5.8 million barrels a day at the start of the new year.
Thee are wires that report that Russian oil companies are in discussions with government authorities over a possible delay to its plans to increase its oil production from the start of 2021.
Reuters reported Monday, citing Interfax, that the Russian Energy Minister planned to talk with domestic oil companies about the OPEC+ oil output agreement.
Meanwhile, analysts at TD Securities explained that it’s also important to keep the breakdown in mind when gauging the potential scope of a relief rally in coming weeks.
”Further, the portion of the selloff attributable to demand expectations will also hold a high beta to vaccine newsflow in months following the election.”