Crude Oil Prices Soar Post-US Presidential Elections

The global Crude Oil market has experienced a significant uptick in prices during the first week of November following the results of the US Presidential Elections. This price rally was attributed to geopolitical tensions and delays in OPEC+'s production surge. The demand for Crude Oil has recently rebounded amid a potential change in geopolitical alliances, trade policies, and economic regulations after Trump’s victory impacted global Crude Oil demand.

Crude Oil prices have significantly rebounded during the first week of November following OPEC+'s strategic move to stabilize the market with Brent settled at USD 74.67/barrel a hike of 2.8% while WTI at USD 71.19/barrel at a surge rate of 3.5%. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, have taken a proactive approach to stabilize the Crude Oil market. The group's decision to extend its 2.2 million barrels per day (bpd) production outputs through December 2024 reflects concerns over falling oil prices and sluggish global demand. By limiting supply, OPEC+ aims to prevent a further decline in prices and support market stability. Moreover, geopolitical tensions, particularly between Iran and Israel, have introduced a significant element of uncertainty into the global Crude Oil market. Any escalation in these tensions could potentially disrupt oil supplies from the Middle East, a region that is crucial to global Crude Oil production. The market's sensitivity to geopolitical risks has been evident in recent years, with even minor incidents leading to price spikes. Additionally, the formation of Tropical Storm Rafael in the Gulf of Mexico poses a potential threat to U.S. oil production, leading to supply disruptions in the manufacturing units.

Economic stimulus measures implemented by various countries, particularly China, have also contributed to the rise in Crude Oil prices. China, a major global oil consumer, has been actively stimulating its economy to boost domestic demand. As the Chinese economy recovers, it is expected to drive increased demand for Crude Oil, thereby supporting higher prices. Furthermore, expectations of potential interest rate cuts by the Federal Reserve have also positively impacted market sentiment. Lower interest rates can stimulate economic activity and investment, leading to increased demand for oil. To support the market dynamics, Last week, refineries in the United States operated at 90.5% of their capacity. As per ChemAnalyst, Crude Oil prices are expected to remain high during the upcoming weeks of November 2024 due to positive market sentiments after former president Trump’s win.