Oil Rebounds to Near $39.0 amid Ballot Counting

WikiFX News (4 Nov.) - The US presidential election is held on November 3 (local time) as scheduled. The result may be delayed due to the mail-in voting triggered by the pandemic. The DXY fell sharply on the eve of the election result, with WTI crude oil rebounding to near $39.0.

Ballot counting is now underway in Indiana, Kentucky and New Hampshire, but mail-in voting could delay results for days or even weeks. Morgan Stanley forecasts an 80% probability for an available result on November 4 and a 70% for that within a week.

Despite Bidens lead, the states of Pennsylvania, Michigan and Wisconsin are key strongholds for Trump. The result in Pennsylvania won't be tallied until Wednesday morning (local time), while that in Wisconsin is only available in the early hours of Wednesday.

With the election being the markets biggest uncertainty, a bigger stimulus package is on the cards regardless of the winner, which may put a premium on crude oil.

Oil prices are staging a powerful rally with key support below at $34.50. However, it is necessary to stay alert to risks arise from wide swings in WTI, considering election uncertainties.

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Chart: Trend of Crude Oil