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Oil prices extend rally ahead of U.S. election

Oil prices extended their rally on U.S. Election Day amid a recovery in financial markets on Tuesday, but concerns over surging coronavirus cases around the world capped further gains. Brent crude futures rose 70 cents, or 1.8% to $39.67 a barrel at 0845 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 78 cents, or 2.1%, to $37.59 a barrel. Both benchmarks gained nearly 3% on Monday.

Italy is the latest country in Europe to tighten COVID-19 restrictions, including limiting travel between the worst-hit regions and imposing a nightly curfew, which will limit fuel demand. Benchmark prices, down sharply over the past week, had a brief reprieve on Monday after Russia’s oil minister held talks with domestic oil companies on a possible extension of oil output restrictions into the first quarter of 2021.

The Organization of the Petroleum Exporting Countries and allies including Russia, a group called OPEC+, slashed oil output from May to support prices and tapered the cut to 7.7 million barrels per day (bpd) in August. They are due to taper the cuts off by 2 million bpd in January. Rising production from Libya which is on course to hit 1 million bpd in the coming weeks, from just 100,000 bpd in early September, will also be a concern for OPEC+. OPEC+ holds its next full meetings on Nov. 30 and Dec. 1.

Oil prices extend rally ahead of U.S. election, Reuters, Nov 3

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