(Bloomberg) -- Oil went into a holding pattern as investors turned their full focus to the tight US presidential election, after prices jumped on Monday on OPEC+’s supply-curb extension and tensions in the Middle East.
Brent traded near $75 a barrel after rising almost 3% in the previous session, while West Texas Intermediate was above $71. Polls suggest the race between Donald Trump and Kamala Harris remains very close. The outcome — which may be contested — carries the potential to reshape US trade, foreign, security and climate policies, with far-reaching consequences for the commodity.
Crude’s tight trading pattern was matched by other major assets, including gold, which was barely changed ahead of election day in the US. A gauge of the greenback steadied after falling in the week’s opening session.
The international oil benchmark has lost 13% since the end of June on disappointing Chinese demand and surging supply from the Americas, particularly the US, prompting the OPEC+ alliance to push back a plan to restore production. Tensions in the Middle East, as Israel faces off with Iran after more than a year of conflict, have also buffeted prices.
The action by OPEC+ “suggests that the group is more willing to support the market than many had expected,” said Warren Patterson, head of commodities strategy at ING Groep NV. “Tension in the Middle East and Gulf of Mexico storms provide some upside risk, while oil is also vulnerable to getting caught up in any broader market moves related to the US election.”
The US election remains on a knife edge after months of intense campaigning. A second Trump administration may be more welcoming to the US shale industry, over renewables. Separately, RBC Capital Markets LLC has said such an outcome may shift foreign policy, with the possibility of tighter sanctions against Iran but looser curbs on Moscow’s flows amid the war in Ukraine.
Among potential consequences in Asia, South Korea is considering increasing energy imports from the US if Trump wins, to reduce the country’s trade surplus with America, according to people familiar with the matter.
Meanwhile, Tropical Storm Rafael threatened disruptions at US offshore oil and natural gas platforms in the Gulf of Mexico. Among producers, Shell Plc said it would evacuate some non-essential personnel in the area.
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