Oil gains most in a month as OPEC+ hints at delay to output hike
Oil advanced the most in a month in New York as broader markets rallied and OPEC+ inched closer to delaying a planned easing of output cuts.
U.S. benchmark crude futures climbed as much as 4.1%, extending gains from Monday's rally. Oil took its cue from stronger equities as millions of Americans headed to vote on election day. A weakening dollar also boosted the appeal for commodities priced in the currency, with the Bloomberg Dollar Spot Index falling as much as 0.7%.
OPEC and its allies will "accelerate" the recovery in oil markets at their next meeting, the group's top official said, in another hint about a potential delay to a production hike scheduled for January. Algeria said that -- along with Saudi Arabia, Russia and Iraq -- it's trying to persuade the rest of OPEC+ to extend current supply cuts, state-run news agency APS reported.
"This big selloff last week was a wake-up call to the OPEC+ group," said John Kilduff, a partner at Again Capital. "The renewed shoulder-to-the-wheel type of action that appears to be emerging is helping to support prices."
West Texas Intermediate for December delivery rose $1.47 to $38.28 a barrel at 10:02 a.m. in New York. Brent for January settlement advanced $1.31 to $40.28 a barrel.
Americans are voting in a presidential election that could reshape U.S. policy on a slew of energy-related areas such as fracking and how to address climate change. All the while, a swiftly evolving coronavirus situation in Europe is raising new threats to oil's spotty demand recovery. Demand is recovering "at a very slow speed," according to the Organization of Petroleum Exporting Countries' Secretary-General Mohammad Barkindo.
"All eyes will be on the U.S. election today and tomorrow," said Bjarne Schieldrop, chief commodities analyst at SEB AB. On the possible change of course by OPEC+, he said it would be "a relief for the market if it did not have to worry about an additional 1.9 million barrels a day of supply coming."
The forward curves for both Brent and WTI show some underlying strength beyond the rally in headline prices. The spread between Brent's nearest contracts is heading for a close at its tightest contango structure in a week, as is the prompt spread for WTI.
