NEW YORK CITY – Oil prices rose on Wednesday as US financial markets bounced back from an earlier slide that preceded Donald Trump’s surprise victory in the US presidential election.
As reported by Reuters, crude oil prices had tumbled as much as 4% early in the session, in the immediate aftermath of the US presidential election results. US crude tumbled to near $43/bbl, a near two-month low. The selloff was part of a broad-based market reaction where investors fled risky assets such as stocks and the dollar, which have since turned positive as well.
But, US crude oil prices then settled up 29 cents at $45.27/bbl, off a session low of $43.07. Brent crude was up 31 cents, or .67%, at $46.35 a barrel after falling to $44.40/bbl, the lowest since Aug. 11.
Oil prices briefly tumbled after weekly government data showed another build in US crude inventories, but eventually the market looked past it.
The Energy Information Administration said US crude stockpiles rose 2.5 MMbbl last week, a million more than analysts had forecast. Oil prices are expected to remain at less than half of their level of mid-2014, pressured by excess supplies.
With Trump’s win, OPEC member nations face the prospect of increased US oil output — a major challenge for the 14-country oil-producer group — given his pledge to open all federal land and waters for fossil fuel exploration.
Oil analysts also say while Trump’s victory raised concerns about future economic growth and oil demand, there were supportive factors for prices such as a potential shift in US policy towards Iran.
It remains to be seen whether Trump will revoke the nuclear agreement with Iran that he has criticized. If so, oil prices would presumably rise, the report noted.