On Wednesday, oil prices plunged amid rising market bets that Republican Donald Trump would win the 2024 US presidential elections with a third of the votes counted.
West Texas Intermediate (WTI) futures for December delivery shed 1.75% to $70.73 per barrel on the morning of November 06. Industry watchers also anticipate a 0.73% slump to $70.21 on the upcoming trading day.
Likewise, Brent oil December futures plunged sharply by 1.96% to $74.05 a barrel. Moreover, commodity experts predict a 0.60% decline to $73.61 in the following market session.
As Tuesday’s counting concluded, Trump earned 211 Electoral College votes, far above the 145 scored by Democrat Kamala Harris. However, political experts cautioned that the race’s outcome remains uncertain as results from critical battleground states might take days to be called.
In addition, the API reported a significant increase in crude oil stockpiles of 3.13 million barrels last week. This figure was sharply above the anticipated build of 1.80 million barrels, reversing the 0.57-million-barrel draw in the preceding period.
Trading platform Phillip Nova emphasized the higher-than-expected inventory build as a sign of rapidly softening petroleum demand. In line with this, analysts predict the EIA will report an increase of 300,000 barrels for the week ending November 01.
Trump Prospects Alarm Oil Industry Participants
ANZ Research claims that a Trump win would be bullish for the oil market in the near term due to higher prospects of further Iranian crude sanctions. However, the group also warned that Trump’s second term’s potential long-term negative impact could be devasting.
Commodity specialists added that expected protectionism policies under the Trump administration would heavily dampen offshore demand. Investors also predict stock-friendly policies, stoking corporate optimism and strengthening the US dollar.
A stronger greenback makes USD-denominated commodities such as crude oil pricier for holders of other currencies. Hence, international traders would likely reduce their orders as they search for alternative energy sources.
