Oil Futures Settle Lower
Crude oil prices drifted lower on Thursday, snapping a three-day winning streak, as rising coronavirus cases and the delay in outcome of the U.S. Presidential election weighed on the commodity.
With coronavirus cases continuing to see a surge and several countries across Europe imposing tougher lockdown measures, the outlook for energy demand has weakened, contributing to a drop in crude oil prices.
The continued uncertainty about election results in the U.S. and likely legal battles over results, could delay a stimulus plan and result in additional pressure on oil prices.
West Texas Intermediate Crude oil futures for December settled with a loss of $0.36 or about 0.9% at $38.79 a barrel.
Brent crude futures were lower by about 0.40 or 0.9% at $40.83 a barrel.
The Federal Reserve today left interest rates unchanged at near-zero levels.
The accompanying statement said the Fed expects rates to remain unchanged until labor market conditions have reached levels consistent with the central bank’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.
In U.S. election news, though Democrat Joe Biden appears positioned to win enough battleground states to put himself in the White House, the Republicans look set to retain control of the Senate.
A divided Congress could hamper Biden’s plans on climate change, economic stimulus and the easing of sanctions on Iran.
Late Wednesday, the Trump campaign filed lawsuits and demanded recounts in a bitter contest that has yet to be decided.
Analysts said a long drawn-out fight for the White House and prolonged period of uncertainty as a result of court challenges and recounts could cause additional uncertainty in the market, spawning further sell-offs within risky asset classes, including oil.
The European Commission said today that the euro area is expected to recover next year at a slower than previously estimated pace as the resurgence in coronavirus infections led to the re-introduction of containment measures.
The Bank of England today left its interest rates unchanged and increased its bond-buying stimulus as it prepared for economic damage from new coronavirus lockdowns and the looming risk of Brexit. The bank said the British economy will likely shrink a record 11% over the course of 2020.
The material has been provided by InstaForex Company – www.instaforex.com