On early Friday, oil prices tumbled amid expectations that Hurricane Rafael will subside in the coming days, easing disruptions in the Gulf of Mexico.
West Texas Intermediate (WTI) December futures tumbled by 1.11% to $71.39 per barrel on the morning of November 08. Commodity specialists expect the bearish momentum to continue with a 0.67% plunge to $70.91 in the following market session.
Similarly, Brent oil futures for December delivery plummeted by 1.02% to $74.86 a barrel. Industry watchers forecast a 0.55% dive to $74.45 on the upcoming trading day.
Despite the prospective Friday loss, both petroleum benchmarks are on track to end the week higher, buoyed by the 2024 US election results. WTI will finish with a weekly gain of 2.73%, while Brent will surge by 2.41% if prices hold.
Producer sentiment skyrocketed following Donald Trump’s commanding win over Kamala Harris, securing him a second term as the US President. Analysts expect the Trump administration to implement protectionist policies to stimulate the lucrative oil industry.
Given Trump’s aversion to regulations, participants see an easier time ramping up fossil fuel exploration and production. Moreover, the 47th president-elect is predicted to implement tighter sanctions on Iran and Venezuela.
However, the price growth was limited by the higher-than-expected build in EIA-monitored crude inventories. Last week, US stockpiles added 2.15 million barrels, more than seven times the projected increase of 300,000 barrels.
Hurricane Rafael Predicted to Depart US Oil Fields
Weather forecasters projected that Hurricane Rafael’s impact on the Gulf’s oil production would diminish from Friday through the weekend. The storm has resulted in a stoppage of 391,214 barrels per day in American petroleum production.
The US National Hurricane Center said that Rafael is slowly moving westward and will completely depart the Gulf of Mexico by Monday. This would allow halted refineries to resume operations, bringing output to normal levels within the week.
Lastly, crude oil prices faced significant pressure from falling shipments to China, the world’s largest black gold importer. In October, Beijing purchased 44.70 MMT of petroleum, down 9.00% year-over-year and marking the sixth consecutive month of decline.
