Oil climbs as US stockpiles shrink, election uncertainty looms over market

TOKYO (Reuters) – Oil rose nearly 2% early on Wednesday after industry data showed crude inventories in the United States dropped sharply, but analysts said uncertainty had crept into the market amid growing suspense over the result of the U.S. presidential election.

West Texas Intermediate was up 71 cents, or 1.9%, at $38.37 a barrel by 0157 GMT, having gained more than $1 earlier in the day. Brent crude was up 64 cents, or 1.6%, at $40.35.

Oil prices dropped more than 10% last week with rising coronavirus cases around the world and more restrictions on movement hitting demand prospects. U.S. oil has nearly recouped those losses in three days of gains this week in the run-up to the election.