Business

Oil prices jump after Trump’s faulty claim to victory, Bonny Light up $1.29

Published

3 years ago

November 4, 2020

Oil prices rise as OPEC, allies agree deal to cut output by 10m barrels/day

Oil prices climbed by around 3% on Wednesday following U.S. President Donald Trump’s false claim to electoral victory in a keen race at a time millions of votes were waiting to be counted and the final result was yet to be announced, Reuters reported.

A win for Trump is perceived as helpful for oil due to sanctions on Iran and his backing for the oil cuts implemented by the Organisation of the Petroleum Exporting Countries (OPEC) which could support prices

On the other hand, a Joe Biden victory will be bearish on account of the Democratic Party candidate’s green policies and softer stance for Iran.

West Texas Intermediate advanced by $1.03 or 2.66% to $38.69 per barrel by 10:55 West Africa Time while Brent crude lifted by $1.09 or 2.67% to $40.80.

On Tuesday, Bonny Light, Nigeria’s premium crude grade, rose by $1.29 or 3.44% to $38.81.

Trump made a false statement he had won after Biden said he was optimistic of emerging winner of an election that would not be decided until a couple of states complete tally of votes in the hours or days ahead.

“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.

Bonds saw higher trading as vote counting pointed to a close contest between both candidates contrary to expectations.

Prices were strengthened by as OPEC and Russia mulled suspending an oil supply increase plan starting from January as new round of coronavirus infections capped fuel demand recovery.

OPEC alongside its Russia-led allies, a cartel known as OPEC+, earlier consented to pare down current cuts by 2 million barrels per day (bpd) from 7.7 million next January.

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