As U.S. voters head to the polls to determine the 45th President of the United States, oil prices were volatile on Tuesday.
Benchmark Brent crude and West Texas Intermediate were both down approximately 0.5%, trading at around $45.91 and $44.65, respectively, at 9 a.m. Prices continued falling but rebounded in midday trading, with WTI up 0.51% to $45.12 and Brent up 0.09% to $46.19.
While the election results won't be final until the end of day at the earliest, the Organization of Petroleum Exporting Countries (OPEC) says the oil market reached a turning point this year toward a more balanced market, despite recent volatility. Furthermore, medium-term oil demand is forecast to increase to 99.2 million barrels per day (mb/d), but long-term demand is expected to reach 109.4 mb/d, a downward revision of 0.4 mb/d to OPEC's prior estimates as the cartel anticipates tightening energy policies and alternative energy growth.
It's no secret that oil prices have been unstable this year, as OPEC outlined in its 428-page World Oil Outlook report. Beginning in January, the OPEC Reference Basket (ORB) "reached its lowest level ($22.48/barrel) since the price decline that started in the second half of 2014." Since then, it has fluctuated in the $40 to $45 per barrel range. Yet, the organization says demand of approximately 1.2 mb/d "remains relatively healthy."
Looking toward the medium term (2021), OPEC expects prices to recover and reach $60 a barrel by 2021 (or $65/b in nominal terms), with an outlook of $92 a barrel by 2040 (in 2015 dollars), "which is equivalent to $155/b in nominal terms."