Crude oil prices ascended Monday morning after trading unfavorable last week. The current trading week began with an increase in investor appetite for risky assets, which acted as support for black gold.
The price of futures contracts for Brent crude oil for delivery in January on the trading floor in London rose immediately by 2.64%, which sent it to $40.49 per barrel.
The price of futures contracts for WTI light crude oil for delivery in December on the electronic trading platform in New York rose 2.85% which sent it to $ 38.2 per barrel.
Monday morning was a turning point for oil: its price finally began to rise after a rapid fall that occurred on the last working day last week. Risky assets are again gaining popularity among investors, which may be due to the result of the recent US presidential election. Before the previous week ended, America has welcomed Joe Biden as its new President, succeeding Donald Trump in the position.
The end of the election race and the hype around the election process is already calming the markets, and Biden's victory sets investors up for a more positive mood.
The risk is becoming more popular: there is almost no doubt about who will take the presidency. All attacks in the direction of rigging the results are unlikely to change the situation or even just cause any significant wave of discontent. Investors gradually come to their senses and move to active trades in the markets without much excitement.
Moreover, one should expect that now the main factor exerting serious pressure will again be the epidemiological situation in the world, which has temporarily faded into the background. Now market participants will have to re-assess the risks associated with new restrictive measures and the number of new cases of infection. At present, new anti-records are recorded regularly and the total number of infected people is already at full speed approaching 10 million cases. Just last week, another record growth of 126,000 cases per day was observed. Of course, the oil market cannot turn a blind eye to such negative statistics since it directly affects the price of black gold and the further position of this sector of the economy.
Despite the fairly confident growth on Monday morning, the initiative still remains in the hands of sellers, and the bearish trend has not been reversed.
The main problem that is associated with the coming to power of Joe Biden will be related to the possible lifting of sanctions against Iran and Venezuela. If this happens, the first affected party will be the supply of raw materials on the market. It is already excessive for the current difficult situation with the spread of coronavirus and quarantine sanctions, so new arrivals will only worsen the existing problems. Accordingly, it is not worth waiting for the price of black gold to rise significantly. The short - and medium-term prospects for the oil market are very negative. And with analysts expecting an increase in the supply of about 2 million barrels per day, it becomes very vague and uncertain.
Market participants are particularly concerned about the growing number of operating oil production facilities in the US. According to the report last week, the number of oil-producing stations increased by five units, with a current total of 226 units. This fact also makes investors doubt the stability of the hydrocarbon market in the near future.
