Oil gains as Opec+ hints at delay to output hike

Bloomberg

Oil rises as broader markets rallied and Opec+ inched closer to delaying a planned easing of output cuts.
Futures in New York traded near $38 a barrel after climbing 3.3%, extending gains from the previous session. Equities strengthened ahead of the US election, while the dollar lost 0.5%, adding to positive sentiment in crude.
Russian oil companies met Energy Minister Alexander Novak to discuss delaying a tapering of Opec+ production cuts by three months. The Organisation of Petroleum Exporting Countries (Opec) and its allies were set to add almost 2 million barrels a day from January, but the group’s secretary general said on Tuesday that demand is
recovering at a “very slow speed.”
This week promises continued oil-market turbulence, with Americans heading to the polls for an election that could reshape US policy on everything from fiscal stimulus to Iran and fracking.
China, meanwhile, remains the bright spot for global demand, with authorities raising the quota for use of overseas oil by non-state entities next year by more than 20%.
“All eyes will be on the US election,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. On the possible change of course by Opec+, he said it would be “a relief for the market if it did not have to worry about an additional 1.9 million barrels a day of supply coming.”
The growth in the Chinese import quota, which is equivalent to about 823,000 barrels a day, is largely due to refining-capacity expansions by Zhejiang Petrochemical and Shenghong Petrochemical Group. Chinese oil buying has picked up in recent weeks with traders hoarding cargoes of everything from Russian to Angolan crude in preparation for the new quota.
Russia’s Novak said that uncertainty is preventing a return to pre-Covid oil demand levels. Yet the new lockdowns in Europe aren’t as severe as earlier in the year, he said.