The reason for this was the summary of the results of the vote in the US elections, accompanied with a very promising first evaluation of Phase 3 of their vaccine candidate trial has been published by Pfizer Inc (PFE) and BioNTech SE (BNTX), news that has stimulated stock exchanges worldwide.
Against the backdrop of improving general sentiment on world markets, oil prices added about 2.6 percent on Monday, November 9. The reason for this was the summary of the results of the vote in the US elections, which was won by Joe Biden. However, the probability that the election results may be reviewed in the course of legal proceedings launched by Donald Trump’s headquarters cannot be eliminated, and the response of the financial community could be unpredictable in this case. In any event, it is too early to speculate about the conclusion of the presidential race as there is need to wait in a number of states for court rulings, and probably the Supreme Court, and then the electoral vote results.
As for the oil market, weakening demand against the backdrop of a coronavirus pandemic and rising supply as a result of increased production in Libya remain the main factors.
Despite the fact that the issue of COVID-19 has pushed into the background in recent days, the pandemic scenario in the world continues to be extremely worsened and, at least until the end of the month, a number of main countries will be subject to strict quarantine steps. It is clear that this would have a negative effect on the rate of recovery in global oil demand and will lead to a short- and medium-term decline in oil prices.
Moreover, the rise in demand in Libya generates pressure from the supply side on the black gold market. The country has now reached a production level of more than 1 million barrels per day, according to the latest statistics. However, the National Oil Corporation of Libya (NOC) states that such production levels would not be capable of being sustained for a long time.
The boost in productivity in the United States is also worth noting. The number of active drilling rigs in the country increased by 5 units to 226 units in the week ending November 6, according to data from the American oilfield services company Baker Hughes.
In the range of $39.30 and $41.35, the price of Brent crude oil consolidates under the 50-day moving average. Stochastic lines are in a neutral position, suggesting that the quotes in the short term are equally likely to shift up and down.
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On the other end, Gold had its worst day on Monday in more than seven years, a victim of a return to the appetite for risk triggered by the hope of a coronavirus vaccine.
For the December futures contract on the Comex, the yellow metal, which had taken advantage of the uncertainties in recent weeks, fell 5% to $1,854.40 an ounce.
After breaking through the 50-day moving average axis, quotes begin to move higher. The present level of resistance is $1980. Stochastic lines are in the region of heavy overbought, which suggests the instrument’s limited growth potential in the short term.
The decline in gold was accelerated by a recovery in the dollar, which increased by 0.7% to 92.86 points on Monday on the dollar index, which tests its evolution against a basket of six currencies (euro, sterling pound, yen, Swiss franc, Canadian dollar and Swedish krona).