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Oil rebounds before US election as earthquake shakes Oklahoma

Monday, November 7, 2016 - 17:07

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Oil rebounded amid a broader market rally ahead of the US election as an earthquake struck Oklahoma on Sunday near the nation's largest crude-storage hub.

[HONG KONG] Oil rebounded amid a broader market rally ahead of the US election as an earthquake struck Oklahoma on Sunday near the nation's largest crude-storage hub.

Futures rose as much as 1.8 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. 

A magnitude 5 earthquake struck near Cushing, prompting some pipeline operators to shut operations at the site as a precaution. There is no going back on an Opec agreement to curb production, Algeria's energy minister said, according to state-run news agency APS.

Oil has 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.

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Opec pumped at a record rate in October, according to data compiled by Bloomberg. Asian equities and US stock index futures gained ahead of Tuesday's election.

"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 79 US cents to US$44.86 a barrel on the New York Mercantile Exchange, and was at US$44.72 at 3:18pm in Hong Kong.

The contract slid 59 US cents to US$44.07 on Friday. Total volume traded was about 6 per cent above the 100-day average. Prices slipped 9.5 per cent last week, the most since the period ending Jan 15.

US Earthquake

Brent for January settlement rose as much as 80 US cents, or 1.8 per cent, to US$46.38 a barrel on the London-based ICE Futures Europe exchange. Prices declined 8.3 per cent last week, the most since January. The global benchmark traded at an 88-cent premium to January WTI.

The MSCI Asia Pacific Index advanced as much as 0.6 per cent, climbing for the first time in four sessions. The FBI is sticking with its view after reviewing new communications potentially related to the Democratic candidate, director James Comey said in a letter to Congress.

The tremor occurred 2 kilometres west of Cushing at a depth of 5 kilometres, the US Geological Survey said on its website. Magellan Midstream Partners LP, a pipeline operator, is working through a controlled shutdown of its assets in the area, spokesman Bruce Heine said in an e-mailed statement. There was no damage to its assets and it expects to resume operations on Monday, he said.

BLOOMBERG

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