Oil & Gas Oil slips as investors digest US election fallout By Reuters November 7, 2024, 8:00 AM Reuters/Andrew Kelly A screen at the New York Stock Exchange after Donald Trump won the US presidential election Oil slipped on Thursday, extending a sell-off triggered by the US presidential election, as a strong dollar and lower crude imports in China outweighed supply risks from a Trump presidency and output cuts caused by Hurricane Rafael. Donald Trump’s election win initially triggered a sell-off that pushed oil down more than $2 as the dollar rallied. But crude prices later pared losses to settle at a less than 1 percent decline by the end of Wednesday’s session. Brent crude oil futures fell 48 cents, or 0.6 percent, to $74.44 a barrel by 10:40 GMT on Thursday. US West Texas Intermediate (WTI) crude slipped 61 cents, or 0.9 percent, to $71.08. Downside factors include a strong dollar and sluggish demand, while upside pressures come from potentially increased sanctions on Iran and Venezuela under Trump, as well as conflict in the Middle East, said Saxo Bank analyst Ole Hansen. “Some of these potential drivers will have no impact in the foreseeable future, but they all add up to the current narrative leading to rangebound trading,” he said. “Absent any major geopolitical escalation, the short-term outlook leans toward downside risk in my opinion.” The dollar held near four-month highs on Thursday as investors prepared for several central bank decisions, including from the US Federal Reserve. A strong dollar makes oil more expensive for other currency holders and tends to weigh on prices. “Historically, Trump’s policies have been pro-business, which likely supports overall economic growth and increases demand for fuel,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “However, any interference in the Fed’s easing policies could lead to further challenges for the oil market.” Opec+ overproduction persists as oil price sags The elephant in the FII Plenary Hall: the US election A Trump win would impact Gulf trade and oil markets Further downward pressure came from data showing that crude oil imports in China fell 9 percent in October – the sixth consecutive month showing a year-on-year decline – as well as from a rise in US crude inventories. Trump is expected to reimpose his “maximum pressure policy” of sanctions on Iranian oil exports. That could cut supply by as much as one million barrels per day (bpd), according to Energy Aspects estimates. In his first term, Trump also put in place harsher sanctions on Venezuelan oil. Those measures were briefly rolled back by the Biden administration but later reinstated. Actual, rather than feared, supply cuts also lent support. In the US Gulf of Mexico, about 17 percent of crude output, or 304,418 bpd, has been shut because of Hurricane Rafael, the US Bureau of Safety and Environmental Enforcement said.
