Oil prices regain ground as investors eye U.S. election fallout
2024.11.06 20:46
By Colleen Howe
BEIJING (Reuters) – Oil prices edged up on Thursday following a sell-off triggered by the U.S. presidential election, as risks to oil supply from a Trump presidency and a hurricane building in the Gulf Coast outweighed a stronger U.S. dollar and higher inventories.
futures rose 26 cents, or 0.35%, to $75.18 per barrel by 0125 GMT. U.S. West Texas Intermediate (WTI) crude gained 16 cents or 0.22% to $71.85.
Concerns around a Trump presidency squeezing oil supply from Iran and Venezuela as well as an approaching storm “more than offset the post-election impact of a stronger U.S. dollar and … higher-than-expected U.S. inventories,” Tony Sycamore, a market analyst with IG, wrote in a note.
Trump’s election had initially triggered a sell-off that pushed oil prices down by more than $2 as the U.S. dollar rose to its highest level since September 2022. But the front-month contracts pared losses to settle down 61 cents for Brent and 30 cents for WTI by the end of the Wednesday session.
Donald Trump is expected to reimpose his “maximum pressure policy” of sanctions on Iranian oil. That could cut supply by as much as 1 million barrels per day, according to an Energy Aspect estimate, though analysts caution it would be difficult to stop the flow of Iranian oil to China.
Trump in his first term had also put in place harsher sanctions on Venezuelan oil, measures that were briefly rolled back by the Biden administration but later reinstated.
In North America, Hurricane Rafael intensified into a category 3 hurricane on Wednesday, and about 17% of crude oil production or 304,418 barrels per day in the U.S. Gulf of Mexico had been shut in response, the U.S. Bureau of Safety and Environmental Enforcement said.
inventories rose by 2.1 million barrels to 427.7 million barrels in the week ending on Nov. 1, the U.S. Energy Information Administration said on Wednesday, compared with expectations for a 1.1 million-barrel rise. [EIA/S]
