Oil prices rose by about 3% on Monday the day before the US presidential election vote, after several days of losses based on concerns about rising coronavirus cases.
The oil market is under pressure due to concerns about low fuel demand, with several European countries starting to lock-in again to curb the coronavirus. Infections have recently hit daily records in the United States, and traders are worried about the demand that may almost stop.
Brent crude LCOc1 gained $1.03, or 2.7%, to settle at $38.97 a barrel. West Texas Intermediate CLc1 ended $1.02, or 2.9%, higher at $36.81 a barrel.
Both contracts fell more than $ 2 in the session, but they have recovered with strong factory data in Asia and the United States. US manufacturing activity picked up faster than expected in October, and new orders jumped to their highest level in nearly 17 years.
US stock indices rose on Monday, followed by energy futures. Analysts say that if there is no clear winner on Tuesday night, it is likely to shake the stock markets in the short term.
Given the concerns about the fundamentals of oil supply and demand, we will see what role the US presidential election will play and how risk markets will react to the outcome.
The supply of the Organization of Petroleum Exporting Countries (OPEC) increased for the fourth month in October.
The OPEC + group is scheduled to hold a policy meeting on 30 November and 1 December, and plans to increase production by 2 million barrels for January are expected to be delayed.
On Monday, senior executives of Russian oil companies and Russian Energy Minister Alexander Novak are said to have discussed that oil production restrictions could be extended until the first quarter of 2021.
A Libyan source said the oil supply stood at around 800,000 barrels a day, increasing more than 100,000 barrels a day from a few days ago.