Oil prices continued to trade within relatively small trading ranges. The upside was capped due to the lingering worries regarding the economic impact of the COVID-19 measures, while the downside was protected by the OPEC+ production agreement. The black gold prepares for US elections and OPEC+ events, as per ABN Amro.
Key quotes
“Biden win would probably again change the energy landscape from both a supply and demand perspective for oil and gas. For example, Joe Biden would renegotiate a nuclear deal with Iran and lift – some of the – sanctions, he would restrict shale production in the US, and he would boost the economy with new stimulus packages.”
“On 30 Nov and 1 Dec, the OPEC will renegotiate its production policy with non-OPEC members, led by Russia. In the existing agreement, OPEC+ would increase production from January 2021. However, with demand remaining depressed by COVID-19 measures and semi-lockdowns, a jump in OPEC+ crude production would add even more pressure to the already depressed oil prices.”
“The volatile natural gas prices (Henry Hub and TTF) are mainly driven by high inventories and shifting weather patterns which affect demand expectations as is normal for the start of Q4.”
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