Crude oil prices end the week with a gain despite a retreat on Thursday, following the outcome of the U.S. presidential elections and news that OPEC+ will not increase production for the remainder for the year.
At the time of writing, Brent crude was trading at $75.27 per barrel and West Texas Intermediate was trading at $71.92 per barrel, according to Reuters, Brent crude could end the week with again of over 3%, while WTI could do even better, adding 4.1% over the week.
This bullish movement follows OPEC+’s announcement to delay the planned production increase, extending the current cuts of 2.2million barrels per day until December 2024.
The decision reflects the need to support pricesamid weak demand, especially from China, and rising supply outside the group.
The recent positive momentum in crude also found support in geopolitical tensions, particularly in the Middle East. Iran has threatened reprisals against Israel following Israeli airstrikes on October 26.
The possibility of an expanded conflict has reintroduced market concerns, driving crude prices higher aspotential supply disruptions are anticipated. This geopolitical situation could sustain oil price support.
The Tuesday election, however, was the main factor for prices. While the initial reaction of the oil market to the news that Trump had won the vote was bearish, prices later rebounded, largely on expectations that the Trump administration would tighten the sanction screws on Iran and Venezuela, impacting global supply.
At the same time, Trumps pro-oil and gas position would suggest his administration would encourage more U.S. oil and gas production, which would have to opposite effect on prices. Some analysts, however, believe that there may be fewer and milder changes in U.S. federal policies.
“Our core view sees Trump adopt a relatively pragmatic approach to policy, in which he either chooses notto pursue more radical policy shifts, or is held back by institutional constraints or the influence of more moderate policy advisers,” Fitch Solutions’ BMI said in a note earlier today, as quoted by Reuters.
“Markets will be awaiting clarity over how much of an increase in US oil supplies there will be,” Yeap Jun Rong, IG market strategist, told Bloomberg. “Potential tariffs on China are onthe table as well.”
Fuel cards users can expect a jump in the region of 2.9 pence per litre for next week.
