Oil prices rise as investors eye US election fallout
Shafaq News/Oil prices rose on Thursday following a sell-off triggered by the U.S.presidential election, as risks to oil supply from a Trump presidency and ahurricane building in the Gulf Coast outweighed a stronger U.S. dollar andhigher inventories.
Brent crudeoil futures were up 65 cents, or 0.87%, at $75.57 per barrel by 0400 GMT. U.S.West Texas Intermediate (WTI) crude gained 54 cents or 0.75% to $72.23.
Concernsaround a Trump presidency squeezing oil supply from Iran and Venezuela as wellas an approaching storm "more than offset the post-election impact of astronger U.S. dollar and ... higher-than-expected U.S. inventories," TonySycamore, a market analyst with IG, wrote in a note.
Trump'selection had initially triggered a sell-off that pushed oil prices down by morethan $2 as the U.S. dollar rose to its highest level since September 2022. Butthe front-month contracts pared losses to settle down 61 cents for Brent and 30cents for WTI by the end of the Wednesday session.
"Historically,Trump's policies have been pro-business, which likely supports overall economicgrowth and increases demand for fuel. However, any interference in the Fed'seasing policies could lead to further challenges for the oil market," saidPriyanka Sachdeva, senior market analyst at Phillip Nova.
"Withthe bumper surge in the dollar hovering at near 4-month highs, oil seems to betalking massive headwinds in the aftermath of the U.S. election results."
The upsideto oil markets may be limited to the short to medium term as OPEC is expectedto increase supply capacity in January, while historical trends do not suggestsanctions will prevent India and China from continuing to purchase oil fromRussia or Iran, Sachdeva said.
Donald Trumpis expected to reimpose his "maximum pressure policy" of sanctions onIranian oil. That could cut supply by as much as 1 million barrels per day,according to an Energy Aspect estimate.
Trump in hisfirst term had also put in place harsher sanctions on Venezuelan oil, measuresthat were briefly rolled back by the Biden administration but later reinstated.
In NorthAmerica, 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 andEnvironmental Enforcement said.
U.S. crudeinventories rose by 2.1 million barrels to 427.7 million barrels in the weekending on Nov. 1, the U.S. Energy Information Administration said on Wednesday,compared with expectations for a 1.1 million-barrel rise.
(Reuters)
