Oil rose on Monday, with Brent topping $40 a barrel, after Joe Biden clinched the U.S. presidency and buoyed risk appetite, and the Saudi oil minister said an OPEC+ deal on output cuts could be adjusted to offset rising supply and weak demand.
Brent crude had climbed $1.28 cents, or 3.2%, to $40.73 a barrel by 1116 GMT, and U.S. West Texas Intermediate crude was at $38.40, up $1.26 cents, or 3.4%.
"Oil prices surged on Monday benefiting from a risk-on stance and a weaker U.S. dollar driven by Joe Biden becoming president-elect," said Giovanni Staunovo, oil analyst for UBS.
Biden will convene a coronavirus task force on Monday to examine the No. 1 problem confronting him when he takes office in January.
Oil prices remain under pressure by renewed lockdown measures in Europe aimed at containing a rise in Covid-19 cases.
Keisuke Sadamori, IEA director for energy markets and security, told Reuters the new lockdowns appear set to push the outlook for global oil demand toward the downside.
"Major parts of the European continent are in lockdown. This would surely work toward the negative side," he said.
Graphic: Global oil supply and demand -
Meanwhile, the dollar weakened, hitting a 10-week low and boosting commodities priced in the greenback as they became more affordable for investors holding other currencies. [MKTS/GLOB]
Prices also found some support after Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman said the OPEC+ deal on oil output cuts could be adjusted as it has been in the past if there is consensus among members of the group.
The Saudi minister was commenting after being asked whether OPEC+ - which groups OPEC states, Russia and other producers - would stick to existing cuts of 7.7 million barrels per day (bpd), rather than easing them from January to 5.7 million bpd.
Key members of the Organization of the Petroleum Exporting Countries are wary of Biden relaxing measures on Iran and Venezuela, which could mean an increase in oil production that would make it harder to balance supply with demand.
"While a Biden presidency increases the likelihood of Iranian oil supply returning to the market, this is not something that will happen overnight, and we still believe it's more likely an end of 2021/2022 event," ING said in a note.
China, the world's top crude importer, posted a 12% decline in October imports compared with September.