Americas News
Oil Makes Weekly Gains Despite U.S. Election Battle And Covid Concerns
Mirroring the volatility of the as yet undecided outcome of the U.S. presidential election, oil prices on Friday dropped 4 percent, also due to concern over the second wave of virus infections - but still achieved a substantial weekly gain.
Brent settled down $1.48, or 3.62 percent, at $39.45 per barrel, while West Texas Intermediate dropped $1.65, or 4.25 percent, to $37.14 per barrel; for the week, however, Brent was up 5.8 percent and U.S. crude rose 4.3 percent.
Oil prices were also said to be negatively affected by talk that the coronavirus fiscal stimulus package from the White House may be less substantial than originally proposed, but the reason for this could be perceived as good news: senate majority leader Mitch McConnell said the proposal was based on strong economic statistics, including a 1 percent drop in the U.S. unemployment rate.
Plus, despite analytical worries, there is no indication of an interruption in U.S. demand recovery: crude inventories plunged last week by 8 million barrels, against expectations for an increase.
Examples of the embattled energy sector forging onward abound outside of the U.S. as well: Dutch oil and chemical storage company Vopak on Friday reported earnings of 200.1 million euros in the third quarter, only slightly down from the 202.4 million euros earned the year prior, and it said it would accelerate its investments in the remainder of the year.
Still, concerns abound regarding the short-term future of the energy sector, and Bloomberg on Friday published the comments of players such as Marathon Oil and Pioneer Natural Resources regarding how business would proceed under a Joe Biden presidency (Scott Sheffield, CEO of Pioneer, said the biggest issue would be if Biden decides to halt drilling on Federal land by not issuing more leases).
Many of the respondents agreed that the rise of renewables will continue regardless of who sits in the White House.
Concerns over the virus also still dominate oil discussions: Bob Yawger, head of the futures division at Mizuho Securities, said in a note, "The explosion in Covid-19 is a serious demand destruction event; crude oil is looking exhausted and may be vulnerable to a pullback."
