Oil rises after Trump falsely claims victory in tight US election

[LONDON] Oil prices rose nearly 3 per cent on Wednesday after President Donald Trump falsely claimed victory in a tight US election with millions of votes still to be counted and the final result not yet clear.

A victory by Mr Trump is viewed as bullish for oil because of sanctions on Iran and his support for Saudi-led Opec oil cuts to support prices. A victory by his rival Joe Biden would be seen as bearish because of his green policies and softer stance on Iran.

West Texas Intermediate was up US$1.03 cents, or 2.66 per cent, at US$38.69 a barrel by 0955 GMT.

Brent crude was up by 1.09 cents, or 2.67 per cent, at US$40.80.

Mr Trump falsely claimed to have won after his Democratic challenger Biden said he was confident of winning a contest that will not be resolved until a handful of states finish vote counts in the next hours or days.

"This (potential Trump victory) is bullish for oil as Opec+ can keep cutting without fear that Iranian oil supply will come back into the market any time soon," said Bjarne Schieldrop at SEB.

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Equity markets veered and bonds traded higher as vote counting showed the election was closer than polls had forecast.

Prices also drew support as Opec producers and Russia considered deferring a planned increase in Opec+ oil output from January as a second coronavirus wave stifles a recovery in fuel demand.

REUTERS