Crude Surges 3.6% Higher
Fueled by a strong Election Day jump in equity markets, crude futures surged 3.6% higher Tuesday.
Analysts said there were no crude-specific headlines during the trading day that accounted for the oil rally, which was accompanied by a 3% rise in gasoline futures. The increase in oil also was joined by a 0.8% rally in the S&P 500, which typically gets a boost on Election Day.
Front-month crude for December delivery on Nymex jumped $3.06 to settle at $88.71 per barrel. Brent futures settled at $111.07, up $3.34 or 3.1%.
When crude opened Tuesday, market participants cited recent headlines about Middle Eastern tensions and greater optimism about the economic stimulus from rebuilding in the Northeast as factors behind the increase.
But as the trading day continued, oil continued to rally despite no significant oil-specific news.
"We're chasing price," said Tim Evans, an analyst at Citi Futures, who said some buyers were engaging in bargain-hunting after a recent drop in oil prices. Oil prices have receded 13.5% between Sept. 14 and Monday.
Mr. Evans said there may have been some speculation that weekly petroleum inventories could be supportive of price. On Wednesday, the U.S. Energy Department is scheduled to release its weekly inventory report.
"I have not seen anything change for the underlying fundamentals for crude," said Gene McGillian, an analyst at Tradition Energy.
Mr. McGillian said the trading on Monday helped explain Tuesday's rally. When the market couldn't sustain an oil price on Monday below $85 a barrel, there was technical pressure for the commodity to go higher, he said. Another factor in the rally was short covering, he added.
A bullish case could be made for markets regardless of whether the U.S. presidential election is won by Barack Obama or Mitt Romney, Mr. McGillian said. But markets should get a lift either way.
"Whoever wins the market is going to get a boost because the uncertainty is going to disappear," he said.
Front-month reformulated gasoline blendstock, or RBOB, settled at $2.699 a gallon, up 7.87 cents. Heating oil settled at $3.053 per gallon, up seven cents.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- USA Driving Activity to Increase to All-Time Highs
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension