Oil prices rose nearly 3% on Wednesday after President Donald Trump falsely claimed victory in a tight U.S. election with millions of votes still to be counted and the final result not yet clear. Photo: Reuters

A victory by Trump is viewed as bullish for oil because of sanctions on Iran and his support for Saudi-led OPEC oil cuts to support prices. A victory by his rival Joe Biden would be seen as bearish because of his green policies and softer stance on Iran.

West Texas Intermediate was up $1.03 cents, or 2.66%, at $38.69 a barrel by 0955 GMT.

Brent crude was up by 1.09 cents, or 2.67%, at $40.80.

Trump falsely claimed to have won after his Democratic challenger Biden said he was confident of winning a contest that will not be resolved until a handful of states finish vote counts in the next hours or days.

“This (potential Trump victory) is bullish for oil as OPEC+ can keep cutting without fear that Iranian oil supply will come back into the market any time soon,” said Bjarne Schieldrop at SEB.

Equity markets veered and bonds traded higher as vote counting showed the election was closer than polls had forecast.

Prices also drew support as OPEC producers and Russia considered deferring a planned increase in OPEC+ oil output from January as a second coronavirus wave stifles a recovery in fuel demand.

The Organization of the Petroleum Exporting Countries (OPEC)and allies led by Russia, a grouping known as OPEC+, earlier agreed to ease cuts by 2 million barrels per day from the current 7.7 million bpd from January.

More lockdowns could cap oil price gains. Italy, Norway and Hungary have tightened coronavirus curbs, following Britain, France and other countries.