Oil prices go up as people think about Trump’s win, and US crude stocks go up

After falling by more than $2, oil prices went up on Wednesday, even though the Energy Information Administration (EIA) said that U.S. crude stocks rose more than expected.

At 11:07 a.m. EDT, Brent crude oil prices were worth $75.91 per barrel, up 38 cents, or 0.5%. WTI crude oil prices in the U.S. went up by 57 cents, or 0.79%, to $72.56.

The EIA said on Wednesday that crude oil, gasoline, and diesel stocks in the U.S. went up last week.

The EIA said that crude oil stocks rose by 2.1 million barrels to 427.7 million barrels in the week ending November 1. This was more than the 1.1 million barrel rise that experts polled for Reuters.

The big sell-off that happened after Donald Trump was re-elected as president happened because the U.S. dollar was about to have its biggest one-day rise since March 2020. This caused prices to drop by more than $2 per barrel.

“The poll results were over-reacted to,” said John Kilduff, a partner at Again Capital in New York. “A Trump victory could have caused the U.S. industry to sort of drill itself into oblivion and cause a glut.”

He added, “But cooler heads have prevailed, and this market has a lot of problems on its hand,” pointing to the ongoing war in the Middle East as a reason for this.

Investors think that if Trump is elected, the dollar will get stronger because interest rates may need to stay high to fight inflation caused by any new taxes and policies that put more pressure on China’s economy and make people less likely to buy things there.

An analyst at UBS named Giovanni Staunovo said, “A Trump presidency has a bearish spin.” “Tariffs would be negative for economic growth and oil demand growth.”

But Trump could put more sanctions on Iran and Venezuela, which would take barrels off the market and make it more bullish, Staunovo said.

Ashley Kelty, an analyst at Panmure Liberum, said, “He doesn’t care much about renewables and will work to boost U.S. oil production.”

“This is not so good for OPEC+ who will have to decide whether they want to protect market share or try to sustain price levels,” he said.

In a note, Priyanka Sachdeva, a senior market expert at Phillip Nova, said that weakening signs of demand also hurt oil on Wednesday. This came after data from the American Petroleum Institute showed that U.S. crude inventories rose more than expected.

At the same time, oil and gas companies in the U.S. Gulf of Mexico started to shut down because Tropical Storm Rafael was expected to grow into a Category 1 hurricane early Wednesday.