Following Trump’s presidential victory, crude oil reverses some of its recent losses

Crude oil stoops and bounces back following a 3% decline earlier due to Trump’s victory in the US presidential election. As Trump is declared winner and gets an inconsecutive second term as US president, the effects of Tropical Storm Rafael on the Gulf become less significant. On Wednesday, the US Dollar Index also makes a strong comeback and climbs around 2%.

Following the results of the US presidential election, which favoured former President Donald Trump, crude oil has stabilized off its session low this Wednesday. In the run-up to the election, Trump made a pledge to encourage and facilitate additional oil drilling in order to increase oil’s net production. Oil prices would probably trade below their present levels as a result of this, causing yet another supply and demand imbalance in the markets.

In addition to Donald Trump’s reelection, the US Dollar Index (DXY), which measures the performance of the US dollar relative to six other currencies, surged and gained around 2% on Wednesday. Trump would have total control over the decision-making process and be able to get a number of packages, reforms, and additional tariff measures completed without any problems because the Republicans have a chance of taking control over the House of Representatives after gaining control of the Senate.

Earlier on Wednesday, Brent Crude was trading at $74.79 and American Crude Oil (WTI) was trading at $71.26. WTI and Brent are currently down 0.28% and 1.04%, respectively, at $71.83 and $75.12, respectively.

A tropical storm According to statistics from the National Hurricane Center and the Bureau of Ocean Energy Management, Rafael is headed toward a route that may cross paths with BP, Shell, Occidental, and Chevron rigs in the US Gulf region during the next five days. According to Bloomberg, production would be reduced by about 1.7 million barrels per day. According to persons familiar with Energy Ministry information, Russian data indicates that crude production in October was nearly in line with its aim under the OPEC+ agreement, Bloomberg writes.

After members of the OPEC+ producers group said on Sunday that they will postpone production increases by one month, Saudi Arabia reduced its oil prices for Asian importers in December.

The weekly crude report for the week ending November 1 will be made public by the Energy Information Administration (EIA). In contrast to the previous draw of 0.515 million barrels, a build of 1.8 million barrels is anticipated.

Oil Technical Analysis:

OPEC is ready to examine Trump’s potential next steps. Since former US President Donald Trump won the US presidential election, crude oil prices have been gradually declining on Wednesday. Trump reaffirmed his desire to increase mining and drilling in the United States during one of his final rallies. With greater supply than demand, that would indicate that more oil is about to enter the market and cause another imbalance.

The next major obstacle on the upswing is the robust technical level at $74.30, which includes the 100-day Simple Moving Average (SMA) and several important lines. Although it is still a long way off, the 200-day SMA at $76.85 can be put to the test if Middle East tensions increase.

At $70.87, the 55-day SMA has lost control of the market and is no longer able to support prices that have strayed too far. The price was supported by $67.12 in May and June of 2023, therefore traders should look considerably lower. Should that level break, the year-to-date low for 2024 appears at $64.75 and is followed by the 2023 low of 64.38.