Oil prices increased on Thursday following a sell-off triggered by the US presidential election, as concerns over potential supply disruptions under a Trump presidency and the threat of a hurricane in the Gulf Coast outweighed the impact of a stronger US dollar and rising inventories.
Brent crude oil futures rose by 65 cents (0.87%) to $75.57 per barrel, while US West Texas Intermediate (WTI) crude gained 54 cents (0.75%) to $72.23.
Read more: Oil Prices Climb $1 as Gulf Coast Storm Impacts Market and Selloff Eases
Fears of reduced oil supply from Iran and Venezuela under Trump, along with the approaching storm, surpassed the effects of the stronger US dollar and higher-than-expected US oil inventories. Initially, Trump’s election had sparked a sell-off that pushed prices down, but markets later recovered slightly by the end of Wednesday’s session.
Analysts noted that Trump’s policies typically support economic growth and fuel demand, but any interference with the Federal Reserve’s easing policies could pose further challenges for oil markets. While the rising US dollar presents significant headwinds, OPEC’s expected increase in supply capacity in January could limit the price gains in the short term. Additionally, sanctions on Iranian and Venezuelan oil could disrupt supply, but trends suggest that India and China may continue buying from Russia and Iran despite sanctions.
Meanwhile, Hurricane Rafael intensified into a category 3 storm, leading to a shutdown of 17% of crude oil production in the US Gulf of Mexico. US crude inventories also saw an unexpected increase of 2.1 million barrels, compared to the anticipated 1.1 million-barrel rise.
