Oil falls after Trump election as US president sends dollar higher
Shafaq News/ Oil prices fell more than 1% on Wednesday after RepublicanDonald Trump was elected president, pushing the dollar higher.
Trump, 78, recaptured the White House by securing more thanthe 270 Electoral College votes needed to win the presidency, Edison Researchprojected, following a campaign of dark rhetoric that deepened the polarizationin the country.
Brent crude oil futures were down $1.00, or 1.32%, at $74.53per barrel by 10:40 GMT, while US West Texas Intermediate (WTI) crude fell 93cents, or 1.29%, to $71.06 per barrel.
Besides the surging dollar weighing on commodity prices, aTrump presidency could see policies that may further pressure the Chineseeconomy, weakening oil demand in the world's top crude importer, saidindependent analyst Tina Teng.
The dollar was set for its biggest one-day rise since March2020 against major peers as so-called "Trump trades" took off.
A stronger US dollar makes greenback-denominated commoditiessuch as oil more expensive for holders of other currencies.
"A Trump presidency has a bearish spin," UBSanalyst Giovanni Staunovo said. "Tariffs would be negative for economicgrowth and oil demand growth."
However, Trump could renew sanctions on Iran and Venezuela,removing barrels from the market, which would be bullish, Staunovo added. Iranexports about 1.3 million barrels per day.
"In event of a Trump victory, he has little interest inrenewables and will actively encourage US oil production growth," saidPanmure Liberum analyst Ashley Kelty.
"This is not so good for OPEC+ who will have to decidewhether they want to protect market share or try to sustain price levels,"Kelty said.
Weakening demand signals also weighed on oil on Wednesday,said Phillip Nova senior market analyst Priyanka Sachdeva in a note, after datafrom the American Petroleum Institute data showed US crude inventories grewmore than forecast.
US crude oil stocks rose by 3.13 million barrels in the weekended Nov. 1, market sources said citing American Petroleum Institute figures,higher than a 1.1 million barrel build-up projected in a Reuters poll.
Meanwhile, oil and gas producers in the US Gulf of Mexicobegan shutting output as Tropical Storm Rafael is forecast to become a Category1 hurricane by early Wednesday.
(Reuters)
