The election of Joe Biden as President with the first female, Black, and Asian American Vice President in Kamala Harris won’t have a direct impact on commodity markets this week except to switch attention away from Donald Trump and towards hopes for more rational policymaking in Washington.
Oil prices fell below $US40 a barrel on Friday as rising global coronavirus cases stoked fears about weak demand and the impact of a lengthy transition process in the US election race kept investors wary and on the edge.
Brent crude fell $US1.46, or 3.6%, to $US39.47. US West Texas Intermediate dropped $1.58, or 4.1% to $US37.21 a barrel.
France, Italy, and the US reported record coronavirus cases for Thursday and Friday, intensifying concerns that additional lockdowns in Europe could weigh on demand.
Despite the slide on Friday, Brent was still up 4.6% for the week, and US WTI crude ahead by 4.3%.
US coronavirus cases surged by at least 120,276 on Thursday, according to a Reuters tally, the second consecutive daily record rise as the outbreak spreads in every region. It was the highest daily rise so far this year.
In Europe, Italy recorded its highest daily number of COVID-19 infections on Thursday and France reported a record 60,486 new confirmed coronavirus cases on Friday, after posting a record 58,046 on Thursday.
Analysts say weak prices could be supported by emerging moves from OPEC, Russia, and other producers to delay bringing back 2 million barrels per day of supply in January, given weaker demand after new lockdowns. That is looking more and more probable with a meeting due around December 1.
US crude stocks last week fell by 8 million barrels, against forecasts for an increase, but the number of active oil rigs in the uS continues to rise.
Baker Hughes reported last week that the number of active oil and natural gas rigs for an eighth week in a row for the first time since June 2018.
The oil and gas rig count rose four to 300 in the week to last Friday, according to Baker Hughes.
The total rig count fell to a record low of 244 during the week ended August 14, while oil rigs alone fell to a 15-year low of 172 in the same week.
US oil rig numbers rose five to 226 last week, the highest since May, while gas rigs fell by one to 71, according to Baker Hughes.
Domestic production totalled 10.5 million barrels a day, down 2.1 million barrels on a year ago.
Meanwhile gold had its best week in months as investors traded off the uncertainty caused by the pandemic and the uncertain US election outcome.
Some of that uncertainty has been settled for the time being with Joe Biden elected as President, finally.
Comex gold ended around $US1,953.40 an ounce, up 0.34% on the day, and nearly 4% for the week.
Comex silver rose 1.7% to $US25.63 an ounce for a gain of more than 8%. Comex copper rose 3.4% over the week after settling around $US3.1515 an ounce.
Iron ore prices were steady over the week – the price of 62% Fe iron ore fines delivered to northern China ended at $US117.80 on Friday, up 85 cents. That was a touch higher than $US117.49 a tonne.
