SULAIMANI (ESTA) — Oil prices rose more than 2% on Monday, with Brent futures rising above $40 a barrel, after Joe Biden clinched the U.S. presidency and buoyed risk appetites.
Brent crude futures LCOc1 for January climbed 96 cents, or 2.43%, to $40.41 a barrel by 0604 GMT, and U.S. West Texas Intermediate crude CLc1 for December was at $38.08 a barrel, up 94 cents, or 2.53%.
Oil recovered from a 4% decline on Friday, rising along with other financial markets after Biden emerged as the winner in the U.S. presidential race on Sunday, according to Reuters.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, told Reuters.
“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”
Separately, U.S. oil production is set to climb as producers are tapping into a backlog of drilled wells left uncompleted to boost output, Reuters said. The number of operating oil and gas rigs in the United States rose for an eighth week last week, according to Baker Hughes.
Key members of the Organization of the Petroleum Exporting Countries (OPEC) are wary of Biden relaxing measures on either Iran or Venezuela in years to come, which could mean an increase in production that would make it harder to balance supply with demand.
