After a sell-off sparked by the US presidential election, oil prices increased little on Thursday as the threat of a storm developing along the Gulf Coast and a Trump administration offset a stronger currency and a decline in crude imports from China, the world’s largest importer.
By 0700 GMT, Brent crude oil futures had increased 29 cents, or 0.39%, to $75.21 a barrel. At $71.87, US West Texas Intermediate (WTI) crude increased 18 cents, or 0.25%.
Tony Sycamore, a market analyst with IG, wrote in a note that worries about a Trump administration limiting oil supplies from Iran and Venezuela and an impending storm “more than offset the post-election effect caused by a stronger US dollar and … higher-than-expected US inventories.”
As the US dollar surged to its highest level since September 2022, Trump’s win first sparked a sell-off that drove oil prices down by almost $2.
However, by the close of the Wednesday session, the front-month futures reduced losses to conclude at 30 cents for WTI and 61 cents for Brent.
Trump’s policies have historically been pro-business, which probably boosts economic expansion generally and raises gasoline demand.
Priyanka Sachdeva, senior market analyst at Phillip Nova, stated that any meddling with the Fed’s easing policy would cause the oil market to face more difficulties.
In the days following of the US election results, oil appears to be facing significant challenges as the dollar’s spectacular gain hovers at levels close to four-month highs.
According to Sachdeva, the short- to medium-term gains in oil markets could be restricted since OPEC is anticipated to expand its production capacity in January. Additionally, past patterns do not indicate that sanctions will stop China and India from continuing to buy oil from Iran or Russia.
China, the world’s largest importer of crude oil, saw a 9% drop in October imports, marking the sixth straight month-over-month dip, according to statistics released on Thursday.
