Crude prices increased on Monday, with Brent hitting a point of $40 a barrel after Joe Biden took up the presidency of the United States, and signals a rise in risk appetite.
The crude Brent LCOc1 had risen to 40.36 dollars per barrel by 91cents, or 2.3 percent, whereas the USA West Texas Intermediate Oil CLc1 was at $38.04, up 90 cents, or 2.4%.
According to Analyst, oil prices rose, gaining from a risk-on position and a weaker US dollar led by Joe Biden becoming president-elect.
In order to discuss the No. 1 issue he is facing when he assumes office in January, Biden will hold a meeting with a coronavirus task force on Monday. Renewed lockdown measures in Europe aimed at containing an increase in COVID-19 cases continue to put oil prices under pressure.
Besides that, as investors holding other currencies became more accessible, the dollar weakened, entering a 10-week low and lifting commodities priced in the greenback.
The core personnel of the Organization of Petroleum Exporting Countries (OPEC) are sceptical of Biden’s easing measures on Iran and Venezuela, which could make it extremely challenging to balance supply with demand by increasing oil production.
The restoration of Iranian oil supplies, nevertheless, is more likely to arise at the end of 2021 or 2022, ING analysts said.
Compared to September, China, the world’s biggest crude importer, posted a 12 percent decrease in October imports.
OCBC’s Lee said that this data could be pessimistic for international commodity markets: “China may be close to the end of what it needs in the form of raw materials given the number of stocks it has.”
That being said, after Beijing raised quotas by 20 percent, some experts predict imports to spike in 2021.