Brent surged above $ 40 a barrel after Biden clinched the US presidency and stimulated risk appetite. Oil rose on Monday, and the Saudi oil minister said that the OPEC + agreement on supply cuts could be revised to offset increased supply and weak demand.
Brent crude had climbed $1.28 cents, or 3.2%, to $40.73 a barrel by 1116 GMT, and West Texas Intermediate (WTI) crude was at $38.40, up $1.26 cents, or 3.4%.
Oil prices soared, taking advantage of a risk-on stance and the weak US dollar caused by Joe Biden becoming the new president.
Oil prices are under pressure due to the increase in COVID-19 cases and renewed lockdown measures. Much of the European continent has been locked up. China, the world’s largest crude oil importer, reported a 12% decrease in October imports compared to September.
Biden said that when she takes office in January, they will first fight the coronavirus and start a teamwork on this Monday.
Meanwhile, the dollar weakened to a 10-week low, creating an advantage for investors having other foreign currencies. Dollar-denominated commodities have become more logical.
Prices received some support after Saudi Arabia’s OPEC + agreement on oil production cuts said that it could be adjusted, as in the past if there is consensus among group members.
Opec is wary of the prospect of loosening the sanctions imposed on its key members Iran and Venezuela by the new president and administration. While this is a positive situation for the respective countries, it means an increase in oil production and makes it difficult to balance supply and demand. However, this is not something that will happen overnight.