Oil Markets React Post-U.S. Election: Price Volatility Amid Geopolitical Shifts and Supply Disruptions

Market Update: Oil Prices Ease Amid Mixed Sentiment

As of 0641 GMT, Brent crude oil futures recorded a decline of 47 cents, or 0.6%, settling at $75.02 per barrel. Concurrently, U.S. West Texas Intermediate crude futures fell by 55 cents, or 0.8%, reaching $71.70 per barrel. This comes after both benchmarks gained nearly 1% during Thursday’s session.

Weekly Performance and Market Dynamics Despite Friday's pullback, Brent is on track for a weekly gain of 3.1%, while WTI is poised for a stronger 4.1% increase. These gains are supported by a confluence of geopolitical and weather-related factors.

Impact of Hurricane Rafael Hurricane Rafael, which has temporarily halted 391,214 barrels per day of U.S. crude production, is projected to drift westward over the Gulf of Mexico, distancing itself from U.S. oil production facilities. The U.S. National Hurricane Center forecasts the storm to weaken from Friday and through the weekend, which may alleviate supply disruptions.

Geopolitical Influences and Policy Outlook Thursday’s rally was bolstered by expectations of stricter policy measures from the incoming Trump administration, with potential implications for Iranian and Venezuelan oil exports. Such sanctions could tighten global supply, lending upward pressure to prices.

BMI, a subsidiary of Fitch Solutions, noted in a report released on Friday: "We anticipate that Trump will pursue a relatively pragmatic policy approach, either refraining from significant policy shifts or being constrained by institutional checks and the influence of moderate advisers."

Market Headwinds Conversely, market sentiment faced headwinds due to data indicating a 9% decline in October crude imports by China, the world’s leading oil importer. This marks the sixth consecutive month of year-on-year decreases in imports. Additionally, an increase in U.S. crude inventories exerted further downward pressure on prices.