Oil prices edge up on Gulf of Mexico storm ahead of US election results (updated)
05/11/2024 18:46
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US presidential election too close to call
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US dollar slides to 3-week low versus other currencies
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Gulf of Mexico hurricane likely to reduce US oil output
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Markets await US oil inventory data from API and EIA
(Adds latest prices)
By Scott DiSavino
NEW YORK, Nov 5 (Reuters) - Oil prices edged up about 1%
on Tuesday with a storm expected to cut U.S. output in the Gulf
of Mexico and as the U.S. dollar weakened on Election Day with
polls showing America's presidential race exceptionally close.
Brent crude oil futures LCOc1 rose 45 cents, or 0.6%, to
settle at $75.53 a barrel. U.S. West Texas Intermediate (WTI)
crude CLc1 rose 52 cents, or 0.7%, to settle at $71.99.
"Crude oil is bid (up) on bullish supply/demand
dynamics, geopolitics, and election fever, with a little weather
thrown in for good measure," Bob Yawger, director of energy
futures at Mizuho, said in a report.
The U.S. presidential contest between Republican former
President Donald Trump and Democratic Vice President Kamala
Harris hurtled toward an uncertain finish as Americans headed to
the polls.
"The (election) result might not be known for days, if not
weeks, and it will most plausibly be challenged and contested,"
said Tamas Varga, an analyst at PVM, a brokerage and consulting
firm that is part of TP ICAP.
The U.S. dollar .DXY slid to a three-week low versus a
basket of other currencies as traders squared positions ahead of
election results.
A weaker greenback makes oil less expensive in other
countries.
The U.S. services sector accelerated to a more than two-year
high in October as employment rebounded strongly, suggesting
last month's near stall in job growth was an aberration.
The U.S. trade deficit surged to nearly a 2-1/2-year high in
September.
Elsewhere in the U.S., energy firms in the Gulf of Mexico
started evacuating workers from offshore platforms ahead of
Tropical Storm Rafael, on track to strengthen into a hurricane
this week. Analysts say the storm could reduce oil production by
about 4 million barrels.
On Sunday, the Organization of the Petroleum Exporting
Countries and their allies in OPEC+ said they would push back a
production hike by a month from December as weak demand and
rising non-OPEC supply depress markets.
Top oil exporter Saudi Arabia lowered the price for the
flagship Arab light crude it sells to Asia in December.
BUSY WEEK AHEAD
Still, risk-taking remains limited with a busy week -
including the U.S. election, the U.S. Federal Reserve's policy
meeting and a meeting of China's National People's Congress
keeping many traders on the sidelines, said Yeap Jun Rong,
market strategist at IG International, a financial firm.
"Eyes are also on China's NPC meeting for any clarity on
fiscal stimulus to uplift the country's demand outlook, but we
are unlikely to see any strong commitment before the U.S.
presidential results, and that will continue to keep oil prices
in a near-term waiting game," Yeap said.
The chairman and co-founder of Gunvor, one of the world's
largest oil traders, said there is little growth in oil demand
and the industry is probably over-investing somewhat.
In the U.S., oil storage data is due from the American
Petroleum Institute trade group later on Tuesday and the U.S.
Energy Information Administration on Wednesday.
Analysts projected U.S. energy firms added about 1.1 million
barrels of crude into storage during the week ended Nov. 1.
EIA/S API/S ENERGYUSA ENERGYAPI
That compares with an increase of 13.9 million barrels in
the same week last year and an average increase of 4.2 million
barrels over the past five years (2019-2023).
(Reporting by Scott DiSavino in New York, Paul Carsten in
London and Florence Tan and Gabrielle Ng in Singapore;
Additional reporting by Nina Chestney in London; Editing by
Louise Heavens, Kirsten Donovan, Will Dunham, Paul Simao,
Marguerita Choy and David Gregorio)
((mailto:scott.disavino@thomsonreuters.com; +1 332 219 1922;
Reuters Messaging:
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