Written by Georgina McCartney. HOUSTON – Oil prices rose on Wednesday after a drop of over $2, even though U.S. crude inventories increased more than anticipated, as reported by the Energy Information Administration. By 11:07 a.m. EDT, Brent crude oil futures had gained 38 cents, or 0.5%, reaching $202.03 per barrel. U.S. West Texas Intermediate crude increased by 57 cents, or 0.79%, reaching $72.56. According to the EIA on Wednesday, U.S. crude oil, gasoline, and distillate stocks increased last week. Crude inventories grew by 2.1 million barrels, totaling 427.7 million barrels for the week ending in November. The EIA reported a rise of 1 million barrels, which was lower than analysts’ predictions of a 1.1 million-barrel increase in a Reuters poll. Donald Trump’s re-election led to a significant sell-off during the trading session, as the U.S. dollar was poised for its largest one-day increase since March 2020, causing oil prices to drop by more than $2 per barrel. John Kilduff, a partner at Again Capital in New York, remarked that there was an overreaction to the election results, suggesting that a Trump win could push the U.S. industry to excessively drill, resulting in a surplus. However, he noted that more rational perspectives prevailed, despite ongoing issues in the market, such as the continuing conflict in the Middle East acting as a supportive factor. Investors anticipate that a Trump presidency will strengthen the dollar, as interest rates may need to stay high to address inflation caused by potential new tariffs and policies, which could further strain China’s economy and reduce demand for oil. Independent analyst Tina Teng stated that in addition to the strong dollar impacting commodity prices, Trump’s policies might further exert pressure on the Chinese economy, diminishing oil demand from the world’s largest crude importer. The dollar was on track for its largest single-day increase since March 2020 against major currencies as “Trump trades” surged. A stronger U.S. dollar raises the cost of dollar-denominated commodities like oil for holders of other currencies, typically driving prices down. UBS analyst Giovanni Staunovo commented that a Trump presidency carries a bearish outlook. “Tariffs would have a detrimental effect on economic growth and the increase in oil demand.” Trump may reinstate sanctions on Iran and Venezuela, potentially removing oil from the market, which could be advantageous for prices, Staunovo noted. “He shows little interest in renewable energy and will actively promote growth in U.S. oil production,” said Ashley Kelty, an analyst at Panmure Liberum. “This poses a challenge for OPEC, which must decide whether to prioritize market share or maintain price levels,” Kelty commented. Additionally, signs of weakening demand impacted oil prices on Wednesday, as noted by Phillip Nova senior market analyst Priyanka Sachdeva, after the American Petroleum Institute reported that U.S. crude inventories increased more than expected. Simultaneously, oil and gas producers in the U.S. Gulf of Mexico started to reduce output as Tropical Storm Rafael is predicted to strengthen into a Category 1 hurricane by early Wednesday. This article was created from an automated news agency feed without alterations. Stay updated on all Business News, Market News, Breaking News Events, and Latest News Updates on Live Mint. Download The Mint News App for daily market updates. Business News: Markets – Stock Markets – Oil prices increase as investors assess Trump’s victory, while US crude inventories also rise.
