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Oil rebounds before US election amid Opec deal uncertainty

Monday, November 7, 2016 - 09:23

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Oil rebounded amid a broader market rally ahead of the US election as Algeria remains confident Opec will set output quotas at its next meeting to manage production.

[SYDNEY] Oil rebounded amid a broader market rally ahead of the US election as Algeria remains confident Opec will set output quotas at its next meeting to manage production.

Futures advanced as much as 1.3 per cent in New York as equities climbed after the Federal Bureau of Investigation said it maintains the view that Hillary Clinton's handling of her e-mails wasn't a crime.

There is no going back on the agreement set in Algiers in September to curb output, Algeria's energy minister said, according to state-run news agency APS.

Oil retreated below US$45 a barrel following the failure of the Organization of Petroleum Exporting Countries to agree on output quotas for member countries on Oct 28, which must happen before a deal can be finalised. Opec pumped a record 34.02 million barrels a day in October, according to data compiled by Bloomberg.

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Market voices on:

"There's going to be plenty of scope for volatility around the election, but I think markets are adjusting to the likelihood the FBI matter improves Clinton's chances," said Ric Spooner, a chief market analyst at CMC Markets in Sydney.

"The market will continue to have a watching brief on Opec."

West Texas Intermediate for December delivery rose as much as 57 US cents to US$44.64 a barrel on the New York Mercantile Exchange and was at US$44.44 at 11:11am in Sydney. Total volume traded was 19 per cent below the 100-day average. Prices slipped 9.5 per cent last week, the most since the period ending Jan 15.

Brent for January settlement rose as much as 46 US cents, or 1 per cent, to US$46.04 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a 84 US cent premium to January WTI.

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