Brent crude futures dropped 3 cents, or 0.04%, to $75.05 a barrel, while U.S. WTI crude was at $71.43 a barrel, down 4 cents, or 0.06%
Oil prices traded in a narrow range on Tuesday ahead of what is expected to be an exceptionally close U.S. presidential election, after gaining more than 2% in the previous session as OPEC+ delayed plans to raise production in December.
Brent crude futures dropped 3 cents, or 0.04%, to $75.05 a barrel by 0600 GMT, while U.S. WTI crude was at $71.43 a barrel, down 4 cents, or 0.06%.
We are now in the calm before the storm, IG market analyst Tony Sycamore said.
Oil prices were supported by Sunday’s announcement from the OPEC and their allies, a group known as OPEC+, to push back a production hike by a month from December as weak demand and rising non-OPEC supply depress markets.
Still, risk-taking remains limited with a busy week – including the U.S. election, the Fed’s policy meeting, and China’s National People’s Congress (NPC) meeting – keeping many traders on the sidelines, said Yeap Jun Rong, market strategist at IG.
For now, polls suggest the U.S. presidential race will be closely contested, and any delay in election results or even disputes could pose near-term risks for wider markets or drag on them for longer, Yeap said.
Eyes are also on China’s NPC meeting for any clarity on fiscal stimulus to uplift the country’s demand outlook, but we are unlikely to see any strong commitment before the U.S. presidential results, and that will continue to keep oil prices in a near-term waiting game, Yeap added.
More oil could come from OPEC producer Iran as Tehran has approved a plan to raise output by 250,000 bpd, the oil ministry’s news website Shana reported on Monday.
In the U.S., a late season tropical storm predicted to intensify into a category 2 hurricane in the Gulf of Mexico this week could reduce oil production by around 4 million barrels, researchers said.
Technically, crude oil needs to rebound above resistance at $71.50/72.50 to negate the downside risks, Sycamore said, referring to WTI prices.
All of which suggests there won’t be a scramble to chase it higher in the short term, he said.
