OIL FUTURES: Crude strongest since March as market eyes Biden transition, Yellen appointment

New York — Crude oil futures settled at eight-month highs Nov. 24 as President-elect Joe Biden began his transition to the presidency in earnest.

NYMEX January WTI settled $1.85 higher at $44.91/b and ICE January Brent was up $1.80 at $47.85/b.

Oil prices moved higher overnight after US General Services Administration chief Emily Murphy, whose agency is responsible for overseeing presidential translons, told the Biden team that her agency would provide resources needed to ensure a smooth handover of power between the administrations.

President Donald Trump, while reiterating that his campaign would continue to pursue legal actions to prove its victory, offered his support for the move Nov. 23, but notably stopped short of offering a traditional concession.

ADDITIONAL COVERAGE:US energy policy

ADDITIONAL COVERAGE: 2020 US elections

NYMEX December RBOB settled up 5.42 cents at $1.2582/gal and December ULSD was 4.90 cents higher at $1.3595/gal.

Crude oil forward curves turned more bullish amid the rally. The contango in front-month versus year-ahead WTI futures narrowed to 12 cents/b, while year-ahead ICE Brent futures settled 18 cents above the front month contract, opening the first backwardation in that part of the curve since February 26.

The overnight price rally accelerated in US trading as equity markets pushed to fresh record highs, with the Dow Jones Industrial Average on pace to close above 30,000.

A Biden presidency is expected to be more supportive of stimulus spending, fostering faster economic growth and a weaker dollar, according to S&P Global Platts Analytics -- both bullish for oil prices.

However, with Republicans more likely to retain control of the Senate, the administration's ability to pass a stimulus bill may be curtailed. Also, longer term, Biden could embrace a shift to clean energy through climate policy, tougher environmental regulations and restrictions on federal oil and gas permitting.

The front-month ICE New York Harbor RBOB crack against Brent climbed to $4.61/b in afternoon trading, up 39 cents from three-month lows seen Nov. 23.

On Nov. 23, Biden announced former US Federal Reserve chair Janet Yellen would serve as Treasury Secretary and named former Secretary of State John Kerry as the administration's climate envoy.

The appoint of Yellen, who was generally dovish on monetary policy during her tenure at the Fed, underscores the bearish outlook for the US dollar.

ICE US dollar index futures were holding at around 92.19 in afternoon trading, on pace to close at the lowest since late August, when the index fell to a more than two-year low 92.131.

"The dollar is declining now that the Biden administration can finally begin the transition process, somewhat removing a short-term risk," OANDA senior market analyst Edward Moya said in a note, "The dollar's slide however will likely run out of steam as traders enter holiday mode."