(Bloomberg) Oil rose as broader markets rallied and OPEC+ inched closer to delaying a planned easing of output cuts. Futures in New York traded near $38 a barrel after climbing 3.3%, extending gains from the previous session. Equities strengthened ahead of the U.S. election, while the dollar lost 0.5%, adding to positive sentiment in crude.On Monday, Russian oil companies met with Energy Minister Alexander Novak to discuss delaying a tapering of OPEC+ production cuts by three months. The Organization of Petroleum Exporting Countries and its allies were set to add almost 2 million barrels a day from January, but the group’s secretary general said Tuesday that demand is recovering at a “very slow speed.”
This week promises continued oil-market turbulence, with Americans heading to the polls for an election that could reshape U.S. policy on everything from fiscal stimulus to Iran and fracking. China, meanwhile, remains the bright spot for global demand, with authorities raising the quota for use of overseas oil by non-state entities next year by more than 20%.
“All eyes will be on the U.S. election today and tomorrow,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. On the possible change of course by OPEC+, he said it would be “a relief for the market if it did not have to worry about an additional 1.9 million barrels a day of supply coming.”
West Texas Intermediate for December delivery rose 3.3% to $38.02 a barrel at 8:37 a.m. in New York
Brent for January settlement advanced 3% to $40.12 on the ICE Futures Europe exchange
The growth in the Chinese import quota, which is equivalent to about 823,000 barrels a day, is largely due to refining-capacity expansions by Zhejiang Petrochemical and Shenghong Petrochemical Group. Chinese oil buying has picked up in recent weeks with traders hoarding cargoes of everything from Russian to Angolan crude in preparation for the new quota.
Russia’s Novak said that uncertainty is preventing a return to pre-Covid oil demand levels. Yet the new lockdowns in Europe aren’t as severe as earlier in the year, he said.
Other oil market news:
The $3.4 billion U.S. Oil Fund ETF, or USO, started buying December 2021 WTI futures on Monday. It will keep doing so until Nov. 13.
Saudi Aramco left its third-quarter dividend unchanged at $18.75 billion even as it failed to generate enough cash to cover the payout and reported a 45% drop in profit.
Chinese President Xi Jinping said the economy can double in size by 2035 and the country can reach high-income status in the next five years as the Communist Party outlined ambitious plans for the nation’s future.
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