Oil prices settled lower on Wednesday as investors weighed a strong US Dollar as Donald Trump won the US presidential elections.
Brent crude oil futures settled down 61 cents, or 0.81 percent at $74.92 per barrel while the US West Texas Intermediate (WTI) crude settled down 30 cents or 0.42 percent to $71.69.
Mr Trump’s victory in the US presidential election unleashed a massive rally in the Dollar and since a stronger Dollar makes commodities such as oil more expensive for holders of other currencies, prices fell.
The election of the man who once held office from 2016 to 2020 means the renewal of sanctions on Iran and Venezuela, removing barrels from the market, which would be bullish.
Trump’s support for Israel’s Prime Minister Benjamin Netanyahu could heighten instability in the Middle East and
could boost oil prices as investors price in a potential disruption to global oil supplies.
When he assumes office, it is expected that he will continue to support Israel’s efforts.
Commodity experts at Standard Chartered have predicted that OPEC+’s actions are likely to determine the near- and mid-term trajectory of oil prices.
According to StanChart, much of the negative sentiment that has dominated oil markets over the past three months can be chalked up to misapprehensions about the tapering mechanism for the voluntary cuts made by eight OPEC+ countries.
Also, many traders are worried that the balance of oil demand growth and non-OPEC+ supply growth might not offset the scale of restored OPEC+output, leaving oil markets oversupplied.
OPEC recently announced that output increases would be postponed by a month until the start of 2025.
Prices were pressured after the US Energy Information Administration (EIA) reported an inventory build of 2.1 million barrels for the week to November 1.
This compared with a modest inventory draw of half a million barrels for the previous week and a crude oil inventory build for the week to November 1 as estimated by the American Petroleum Institute (API) on Tuesday.
