Oil Rises for First Time in Seven Days as Clinton Gets FBI Boost

  • Equities rally after FBI reaffirms Clinton e-mails not a crime
  • Pipeline operators near Cushing oil hub reopen after tremor

Saudi Arabia Holds Upper Hand as OPEC Seeks a Deal

Oil rebounded amid a broader market rally driven by speculation Hillary Clinton’s chances of winning the U.S. election grew after the FBI said her handling of e-mails wasn’t a crime.

Futures advanced for the first time in seven sessions following the Federal Bureau of Investigation’s report. Global equities surged and the dollar rose against its peers. Russia, the world’s biggest energy producer, is “on board” with an OPEC agreement to limit crude oil production to help re-balance the market, according to OPEC Secretary General Mohammed Barkindo.

"The U.S. election is front and center in all the markets," said Chris Kettenmann, chief energy strategist at Macro Risk Advisors LLC in New York. "There was talk over the weekend of Russia agreeing to limit production in cooperation with OPEC, but we need to see a resolution from the Nov. 8 vote before the focus shifts to Nov. 30."

Oil retreated below $45 a barrel following the failure of the Organization of Petroleum Exporting Countries to agree on output quotas for member countries on Oct. 28, which must happen before a deal can be finalized. OPEC pumped at a record rate in October, according to data compiled by Bloomberg.

West Texas Intermediate for December delivery climbed 82 cents, or 1.9 percent, to settle at $44.89 a barrel on the New York Mercantile Exchange. The contract slid 1.3 percent to $44.07 on Friday, the lowest close since Sept. 20. Prices fell 9.5 percent last week, the most in almost 10 months.

Election Focus

Brent for January settlement rose 57 cents, or 1.3 percent, to $46.15 a barrel on the London-based ICE Futures Europe exchange. Prices declined 8.3 percent last week, the most since January. The global benchmark closed at a 68-cent premium to January WTI.

For a story on money managers reducing bets on higher oil prices, click here.

Oil market volatility, as measured by the Chicago Board Options Exchange Crude Oil Volatility Index, has climbed over the past two weeks as election polls show a tighter presidential race. The index ended Monday at the highest since September.

The S&P 500 Index was set for its biggest gains since March, while the MSCI All Country World Index was set for its biggest advance since June. The S&P Oil & Gas Exploration and Production Select Industry index, up 2.1 percent at 3:02 p.m., was set for the biggest increase since Oct. 10.

"The stock market is up on the increasing likelihood of a Hillary Clinton victory," said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. "This is also strengthening the dollar."

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose as much as 0.5 percent. A stronger U.S. currency usually reduces the appeal of dollar-denominated raw materials as an investment, but most were up amid the widespread rally in markets.

Cushing Tremor

A magnitude 5 earthquake struck less than 2 miles west of Cushing, Oklahoma, the nation’s largest crude-storage hub, prompting some pipeline companies to shut operations. Oklahoma’s oil and gas regulator reported that all pipelines under its jurisdiction were operating again.

Gasoline dropped after Colonial Pipeline Co. restarted the largest U.S. line for the fuel Sunday, six days after an explosion and fire in Alabama during planned work. December futures declined 0.6 percent to $1.371 a gallon, the lowest settlement since Sept. 20. 

Oil-market news:

  • The OPEC technical committee that met last month proposed that the deal to cut output be extended for one year starting in January, to be reviewed after six months, state-run news agency APS reported, citing Algerian Energy Minister Noureddine Boutarfa.
  • Saudi Arabia didn’t threaten to increase its oil production if other OPEC members wouldn’t agree to make cuts, OPEC Secretary-General Barkindo said Friday.
  • Greg Sharenow, portfolio manager at Pimco, says he’s "skeptical" that OPEC could create not just a convincing, but an implementable and enforceable production policy.

— With assistance by Grant Smith

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