Oil is up by another 2% to near $38 today
Oil staged an impressive rebound yesterday, recouping losses from levels under $34.00 to close slightly above $37.00 in a 10% intraday bounce.
The push higher is continuing today as we see oil capitalise on the weaker dollar as well, with price climbing to near $38.00 and testing its 200-hour moving average.
That is currently capping gains alongside the 50.0 retracement level @ $37.67.
The push higher since yesterday has also seen buyers reclaim the 200-day moving average:
That is providing some added technical support for buyers to challenge the key near-term level as seen above closer to the $38.00 level.
In terms of election risk, oil is likely to react in similar vein to risk assets in the sense that it will be part of the anti-dollar trade for the most part.
Looking slightly further out, the outlook doesn't bode well for oil considering that recent virus developments are still plaguing the global economic recovery and the latest lockdown measures in Europe will certainly weigh on demand going into next year.
We may not get something similar to the April crash, but it is likely that oil will see more downside especially if OPEC+ aren't stepping up their game in the coming month.
The push lower yesterday saw lows just under $34.00 but failed to close below support from the mid-June lows @ $34.36-48.
In the grand scheme of things, a Biden or Trump victory matters but there is an argument to be made that a Biden victory would also bode well for the oil market in the long-term - not before the flush lower beforehand though.
