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Raw oil prices closed the last trading session on a bearish note.
Oil prices have been under pressure in recent days as it looks like the most likely winner of the election, Joe Biden, it would be responsible for the most important economy in the world. The assumption that its main focus was on renewables has led to oil prices falling below $ 40 / barrel.
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What we know
Brent crude oil prices closed 3.62% lower at $ 39.45 a barrel. US West Texas Intermediate fell 4.25% to $ 37.14 a barrel.
However, both contracts gained during the week, with Brent up 5.8% and US crude up 4.3%.
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Additionally, the rise in COVID-19 cases in the Northern Hemisphere has stopped the bull’s-eye as fears of oil traders strengthened due to weak demand and as the US elections lingered for days.
France, Europe’s second largest economy, has revealed a record number of COVID cases as efforts in its most recent lockdown measures prevailing at the time have therefore weakened energy demand in the French Republic.
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In the US election, Joe Biden took over from President Donald Trump in Georgia and Pennsylvania, moving closer to White House victory as a handful of states continue to count the votes, forcing oil traders to stop their long bullish bias.
It also seems likely that the Iranians would get their oil back in an already saturated market under the presidency of Joe Biden.
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In an explanatory note to Nairametrics, Stephen Innes, Axi’s Chief Global Market Strategist, provided insights into the prevailing macro, which could impact oil prices in the future. He said:
“The oil market weighs the possible impact of more significant restrictions on U.S. domestic oil and gas production since Joe Biden’s presidency versus greater support for the energy transition and the likelihood of a new engagement with Iran. “
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The latter appears to be the most significant risk to the price of oil, but is unlikely to be a priority for the first year of a new administration.
By far, the most critical questions for oil are how quickly a Covid-19 vaccine is widely available, whether a US stimulus deal can be reached in an unstable and uncertain political environment, and how OPEC will respond to the concerns of the question.
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What to expect
As we head towards the end of yet another rollercoaster week in oil trade analysis, it should be thought that it is encouraging that OPEC + continues to report that the group will do what it can to stop oil prices while we wait. demanding that prospects improve.
