Recently, it became known that Joe Biden got enough votes to take the presidency of the United States. However, current President Donald Trump refuses to admit defeat. His lawyers believe that in some states there were violations in the counting of votes, so they filed lawsuits. According to analysts, the administration of the new US President, Joe Biden, will be more predictable and stable. Also, under the rule of Biden, the adoption of a new stimulus package for the economy seems more likely. These assumptions are driving oil prices up.
However, experts believe that the oil market will remain volatile as Trump's actions delay the announcement of the official election results. Moreover, the number of people infected with COVID-19 continues to increase every day. Also, there are concerns about the demand for oil, as the quarantine was reintroduced in some European countries.
In addition, there are fears that Biden will lift sanctions against Iran and Venezuela. As a result, the supply of oil may increase by more than 1.5 million barrels per day.
Libya also recently reported that the country's production exceeded 1 million barrels per day, the highest level since December 2019.
Brent crude futures for January rose by 2.56% to trade at $40.46 per barrel. WTI crude futures for December grew by 2.69% as well to settle at $38.14 per barrel.
Experts believe that Brent crude will be trading within $39-42 per barrel this week. In general, three factors determine the situation in the oil market: the general situation in the financial markets, the spread of COVID-19, and finally, the response from the OPEC+ countries.
Nevertheless, the outcome of the US election and the development of the coronavirus pandemic will strongly affect the market. The longer it takes to sum up voting results, the worse is the impact on the markets.
Traders hope for the competent decisions of the OPEC+ countries, which closely monitor the situation on the oil market. It looks like the group could change the terms of the deal and postpone the planned increase in production by 1.9 million barrels per day for January 1.
However, experts believe that in November and December there will be a peak of COVID-19 infections in the United States, Europe, and Russia. In other words, within a few months, the demand for oil will improve and the pressure on oil prices will decrease.
