Oil prices jumped early on Tuesday, with Brent back above the $40 a barrel mark, supported by a rally in financial markets and a weaker U.S. dollar on Election Day.
As of 9:45 a.m. EST on Tuesday, WTI Crude was up 3.53 percent at $38.13 and Brent Crude was rallying 3.08 percent to $40.17, returning to above $40 for the first time in a week.
On Monday, oil prices dropped in early trading as more European countries announced lockdowns, but oil closed higher after the U.S. financial markets rebounded later on Monday.
On Tuesday, oil prices rallied early on U.S. Election Day as equity markets around the world and in the U.S. also rose, with traders bracing for the outcome of the election.
Commenting on the move in oil prices early on Tuesday, Tamas Varga with oil brokerage PVM told Reuters:
“The jump has borne all the hallmarks of a massive, logical and even inevitable short-covering prior to the U.S. presidential elections.”
According to the analyst, Tuesday’s oil rally is exclusively due to the U.S. election, not a recovery from the slump in oil prices last week.
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Source: Oil Price