(Bloomberg) -- Oil ticked higher after a roller-coaster session on Wednesday as traders weighed the likely impact of Donald Trump’s election victory on the crude market, with the US dollar pausing after a post-vote surge.
Global benchmark Brent rose toward $76 a barrel after swinging in a more-than-$2 arc in the previous session to end slightly lower, while West Texas Intermediate was above $72. Trump’s election as US president spurred the biggest jump in the dollar since September 2022, pressuring commodities. On Thursday, a gauge of the greenback steadied.
Crude has had a volatile year, buffeted by tensions in the Middle East, OPEC+ supply policy, as well as a weakening demand outlook in top importer China. A Trump administration is expected to be more positive toward the nation’s oil producers, while it may also rejig sanctions policy and enforcement, potentially seeking to curbs flows from major producer Iran.
Trump’s victory is set to shake up US energy and environmental policy, and there’s likely to be sweeping implications for oil production, offshore wind development, and electric vehicle sales. Citigroup Inc. said the win was net bearish for crude’s outlook on prospects for higher supply, as well as fresh trade tariffs on China that may may further crimp growth.
“There are several opposing forces,” said Warren Patterson, head of commodities strategy at ING Groep NV. “On the bullish side, you have the potential for stricter enforcement of sanctions against Iran and more upside to 2025 US GDP growth. However, USD strength, and the prospects for an increase in oil-and-gas leasing on federal lands is more bearish.”
On the weather front, meanwhile, Hurricane Rafael slammed Cuba with Category 3 winds, although the system is expected to weaken before reaching the US coast around the Gulf of Mexico. The threat to oil production has fallen to about 1.55 million barrels a day as the storm’s direction shifted eastward.
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