Oil prices fell over 1% on Wednesday after Donald Trump’s victory in the U.S. presidential election boosted the dollar, making oil more expensive for international buyers.
Trump secured last updated, 277 electoral college votes, surpassing the 270 needed to win, while his opponent, Kamala Harris, received 224 votes. Key wins in swing states such as Wisconsin and Alaska helped Trump reclaim the presidency, marking a historic return to the White House.
Brent crude dropped by $1.00 to $74.53 per barrel, while U.S. West Texas Intermediate (WTI) slid 93 cents to $71.06 per barrel.
Trump’s return to the White House sparked a surge in the dollar, its biggest one-day gain since March 2020. A stronger dollar makes commodities like oil pricier for buyers using other currencies, often reducing demand.
Analyst Tina Teng noted that Trump’s policies might put pressure on China’s economy, potentially lowering oil demand from the world’s largest crude importer.
Analysts have mixed views on Trump’s impact on oil markets. UBS analyst Giovanni Staunovo warned that Trump’s approach to tariffs and trade could slow global growth, which would lower oil demand. However, Staunovo also suggested that Trump might reinstate sanctions on Iran and Venezuela, reducing oil supply and potentially pushing prices higher.
Ashley Kelty from Panmure Liberum added that Trump’s support for U.S. oil production and his limited interest in renewable energy could challenge the global oil market. “This could pose a problem for OPEC+ as they may need to choose between protecting market share or stabilizing prices,” Kelty said.
Adding to price pressures, U.S. crude inventories rose by 3.13 million barrels last week, exceeding the expected 1.1 million barrel increase, according to American Petroleum Institute data. Higher-than-expected inventories signal weakening demand, said Phillip Nova senior analyst Priyanka Sachdeva, which has weighed on oil prices.
Meanwhile, oil producers in the Gulf of Mexico began shutting down production as Tropical Storm Rafael approached, expected to develop into a Category 1 hurricane. This weather threat could create short-term supply disruptions and add volatility to the oil market.
