Current Oil Prices Modestly Rise Prior to US Election and Chinese Power Shift

The current oil prices reflect a modest rise in cautious trade prior to a tight presidential election in the United States and a potentially disruptive change in political power in China.

On the New York Mercantile Exchange, the main contract for December delivery ended higher by 79 cents compared to its settlement during the previous week at $85.65. Meanwhile, the crude price per barrel of Brent for delivery in December gained $2.05 to end the trading session on London’s ICE Futures Exchange at $107.73.

GFT’s Fawad Razaqzada said that the current oil prices reflect a recovery after a sharp sell-off during the last day of the past trading week. ┬áThe prices of crude on the NYMEX tightly moved up and down, with several traders taking advantage of latest sell-offs to buy the futures contract at an appealing cost.

However, uncertainty in the politics of the United States prior to the upcoming election and in China, which is about to start a power transition that occurs only once in ten years, kept investors on the brink, according to iiTrader.com’s Rich IIczyszyn.

The United States is the largest crude oil consumer of the world while China is the biggest overall consumer of energy in general.

According to analysts of UniCredit, the crude price per barrel of Brent fell by almost four percent in the past week. The firm reports that they are seeing the stronger currency of the United States and the cautiousness of investors before the presidential election in the United States and China’s handover of power as the primary cause.

By: Chris Termeer

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