Crude oil prices rallied higher on Tuesday trading session in London. Oil traders are taking a broader risk-on sentiment in markets amid the weaker dollar prevailing, coupled with the bias that OPEC+ is likely to extend its oil production cut.
What we know
The London-based oil contract, Brent crude price traded close to $40/barrel, as traders await the outcome of the U.S presidential election scheduled to hold today.
Recently, Russia’s Energy Minister, Alexander Novak, had a meeting with major Russian oil producers on delaying oil production cuts by at least three months. OPEC+ had earlier hinted on its plan to add almost 2 million barrels a day of supply from early next year.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics spoke on the prevailing market conditions triggering crude oil prices north.
All positive for oil prices, although the reason these changes are being contemplated is that, demand is recovering more slowly than initially envisaged, coronavirus cases are spiking again, Libyan production is ramping up much quicker than expected, and in Russia’s self-serving case, to defend the Ruble in order to avoid an even worse economic collapse from COVID-19.
The real key to at least keep oil prices supported in the near term and pushing prices from the bottom of the barrel is having both Russia and Saudi Arabia singing from the same page in a sign of unified support to defend oil prices.