By Adedapo Adesanya
The oil market edged up about 1 per cent on Tuesday as Americans voted for their next president amid a storm expected to cut US output in the Gulf of Mexico.
Brent crude oil futures rose by 45 cents or 0.6 per cent to settle at $75.53 a barrel and the US West Texas Intermediate (WTI) crude increased by 52 cents or 0.7 per cent to settle at $71.99 per barrel.
The US presidential contest between Republican former President Donald Trump and Democratic Vice President Kamala Harris was widely anticipated by the market, but it remained highly uncertain.
This led the US Dollar to drop to a three-week low against a basket of other currencies as traders squared positions ahead of election results.
A weaker US Dollar makes oil less expensive in other countries and thus lends support to oil prices.
Also, in the US, energy firms in the Gulf of Mexico started evacuating workers from offshore platforms ahead of Tropical Storm Rafael, which is on track to strengthen into a hurricane this week.
Market analysts say the storm could reduce oil production by about 4.9 million barrels.
Rafael would be the 17th named storm this Atlantic hurricane season and the tenth one since September 24. Earlier in the year, the Energy Information Administration (EIA) predicted up to 25 named storms for the season, warning that it would affect the country’s oil and gas production.
These developments extend gains, lapping on to the news that the Organisation of the Petroleum Exporting Countries and their allies in OPEC+ said they would push back a production hike by a month starting in December.
The decision came as weak demand and rising non-OPEC supply weakened the markets.
Meanwhile, supportive data from the US also provided support as the US services sector accelerated to a more than two-year high in October as employment rebounded strongly. This data suggests that September was a different outcome.
In a different outcome, the US trade deficit surged to a two-and-half-year high in September.
The market is also looking at China’s National People’s Congress (NPC) meeting for any clarity on fiscal stimulus to uplift the country’s demand outlook.
Crude oil inventories in the US rose by 3.132 million barrels for the week ending November 1, according to the American Petroleum Institute (API). For the week prior, the API reported a 573,00-barrel dip in crude inventories.
So far this year, crude oil inventories have slipped by just over 3 million barrels since the beginning of the year, according to API data.
Official data from the US Energy Information Administration (EIA) will be published later in the day.
Modupe Gbadeyanka