Oil Prices Rise as Investors Eye US Election Fallout

Oil prices rose on Thursday following a sell-off triggered by the US presidential election, as risks to oil supply from a Trump presidency and a hurricane building in the Gulf Coast outweighed a stronger US dollar and higher inventories.
Brent crude oil futures were up 65 cents, or 0.87%, at $75.57 per barrel by 0400 GMT. US West Texas Intermediate (WTI) crude gained 54 cents or 0.75% to $72.23, Reuters said.
Concerns around a Trump presidency squeezing oil supply from Iran and Venezuela as well as an approaching storm "more than offset the post-election impact of a stronger US dollar and ... higher-than-expected US inventories," Tony Sycamore, a market analyst with IG, wrote in a note.
Trump's election had initially triggered a sell-off that pushed oil prices down by more than $2 as the US dollar rose to its highest level since September 2022. But the front-month contracts pared losses to settle down 61 cents for Brent and 30 cents for WTI by the end of the Wednesday session.
"Historically, Trump's policies have been pro-business, which likely supports overall economic growth and increases demand for fuel. However, any interference in the Fed's easing policies could lead to further challenges for the oil market," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
"With the bumper surge in the dollar hovering at near 4-month highs, oil seems to be talking massive headwinds in the aftermath of the US election results."
The upside to oil markets may be limited to the short to medium term as OPEC is expected to increase supply capacity in January, while historical trends do not suggest sanctions will prevent India and China from continuing to purchase oil from Russia or Iran, Sachdeva said.
Donald Trump is expected to reimpose his "maximum pressure policy" of sanctions on Iranian oil. That could cut supply by as much as 1 million barrels per day, according to an Energy Aspect estimate.
Trump in his first term had also put in place harsher sanctions on Venezuelan oil, measures that were briefly rolled back by the Biden administration but later reinstated.
In North America, 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 US Gulf of Mexico had been shut in response, the US Bureau of Safety and Environmental Enforcement said.
US crude inventories rose by 2.1 million barrels to 427.7 million barrels in the week ending on Nov. 1, the US Energy Information Administration said on Wednesday, compared with expectations for a 1.1 million-barrel rise.

Saudi Riyadh Air is wading back into the jet market after buying dozens of Airbus and Boeing planes and aims to finalise a new deal involving the industry's largest twin-aisle jets early next year, its chief executive said.

The country's newest national airline is weighing up the Boeing 777X and the Airbus A350-1000 and expects to make a decision in the first or second quarters of 2025, CEO Tony Douglas told Reuters.

Riyadh Air last year ordered 39 Boeing 787 wide-body jets with options for another 33 as part of a wider deal also involving existing national carrier Saudia, and last week it added a firm order for 60 Airbus A321neo-family aircraft.

Douglas reiterated that the airline, which plans to start operations next year, ultimately aimed to operate more than 200 aircraft.

Douglas told Reuters in a separate interview last week that Riyadh Air would start formal talks for a new order for large wide-body aircraft within two months.

Oil Prices Rise as Investors Eye US Election Fallout