Get Premium Data for Cyber Monday: Up to 55% Off InvestingProCLAIM SALE

Oil prices retreat as dollar surges in wake of Trump election victory

Published 2024-11-05, 08:54 p/m
© Reuters.
LCO
-
CL
-

Investing.com-- Oil prices fell Wednesday, weighed by a surge in the dollar after Republican Donald Trump was elected president as well as a bigger than expected build in U.S. inventories. 

At 07:30 ET (12:30 GMT), Brent oil futures fell 1.6% to $74.35 a barrel, while West Texas Intermediate crude futures fell 1.6% to $70.83 a barrel. 

Trump returns to the White House

Donald Trump has been elected as the 47th president of the United States, returning to the White House for a second four-year term. 

The Republicans have also taken a majority in the Senate, the upper chamber of the US Congress, and were also on track to win the House of Representatives, raising the possibility of a Republican sweep in the 2024 elections.

Such a scenario would present an easier path for Trump to enact major policy changes, which many have seen as inflationary, boosting the US currency. As a result the US dollar was on course for its biggest single-day uptick since March 2020 against its other major currency pairs.

A stronger U.S. dollar makes commodities denominated in the greenback, such as oil, more expensive for holders of other currencies.

Additionally, a Trump presidency could see policies that may further pressure the Chinese economy, weakening oil demand in the world's top crude importer.

US inventories grow more than expected - API 

Data from the American Petroleum Institute, released on Tuesday, showed U.S. oil inventories grew 3.1 million barrels in the week to November 1, much more than expectations for a build of 1.8 mb.

Product inventories - gasoline and distillates - saw small draws.

The API data usually heralds a similar reading from official inventory data, which is due later on Wednesday. The reading spurred some concerns that U.S. fuel demand was cooling, especially as the winter season approaches. 

U.S. production is also expected to have remained near record highs of over 13 mb a day, keeping supplies in the country relatively high.

But U.S. oil production is expected to face some disruptions in the coming days, especially as energy firms began evacuating workers in the Gulf of Mexico ahead of Hurricane Storm Rafael, which is expected to make landfall in Louisiana later this week. 

The storm strengthened into a category-1 hurricane on Tuesday. 

Busy week continues 

Oil prices were sitting on some gains in recent sessions, after the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, delayed plans to begin increasing production this year. 

Beyond the US election, the focus this week is on a meeting of China’s National People’s Congress, where Beijing is widely expected to outline more plans for fiscal spending.

A Federal Reserve meeting is also due on Thursday, with the central bank widely expected to cut interest rates by 25 basis points.

(Ambar Warrick contributed to this article.) 

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.