On Wednesday, both US and UK crude oil futures’ prices rocketed roughly 4 per cent after the US President Donald Trump had falsely claimed victory with millions of votes yet to be counted, while a major whiplash in US crude inventories had offset worries of a supply glut.
Apart from that, a raft of upbeat factory activity data across the Eurozone and China alongside the United States had added to further optimism, though the US presidential election had been the major market mover on Wednesday.
In point of fact, a victory for the Republican President Donald Trump was being viewed as a bullish wind for crude oil futures’ prices, since it would ratchet up pressure on major OPEC countries likes of US-sanction hit Venezuela and Iran, while a Biden victory would mean a fundamental bear market for the crude oil futures given the extent of support the Democratic challenger had shown thus far for green policies.
Besides, Biden had reiterated a softer stance on Iran-issue several times during his Presidential campaign.
Crude oil gains as Trump falsely claims victory
Apart from an earlier touting from the US President Donald Trump while he had falsely announced a victory in a fiercely contested Presidential election, both US and UK crude futures extended their recent leg of rally into the third consecutive session on Wednesday after data had revealed that the US crude inventories had fallen more than 8 million barrels per day last week due to production decline in the Gulf of Mexico ahead of Hurricane Zeta.
In tandem, Wednesday’s gains in crude oil futures’ prices followed a roughly 2 per cent and 3 per cent gains for both of the benchmarks over the first two days of the current week, eventually paring almost all of the losses, which the black gold futures had to weather last week.
Notably, crude oil futures scheduled to be expired on November 25 had witnessed their sharpest weekly plunge in more than five months last week. Citing statistics, on the day’s commodity market closure, the US West Texas Intermediate (WTI) crude oil futures’ prices surged 4 per cent to $39.15 per barrel, while the UK crude futures jumped 3.8 per cent to $41.23 per barrel.
Meanwhile, referring to a likely Republican majority in the US Senate which meant a lack of prospects on major policy changes, a head of shale Research at Rystad Energy, Artem Abramov said, “Perhaps the biggest conclusion to be drawn at this stage is that there is only a small likelihood that existing oil & gas tax incentives will be removed in the U.S.
– even if Biden emerges as the winner – given the narrow margin of victory and a probable Republic majority in the U.S. Senate. ”