ISLAMABAD, November 6, 2024: Oil prices dropped on Wednesday as early results from the U.S. presidential election showed a tight race between Republican Donald Trump and Democratic Vice President Kamala Harris, leaving markets uncertain about the outcome.
At 0132 GMT, U.S. West Texas Intermediate (WTI) crude was down 27 cents, or 0.4%, trading at $71.72 per barrel, while Brent crude fell 35 cents, or 0.46%, to $75.18 per barrel.
Trump was projected to have won eight states in Tuesday’s election, while Harris secured three states and Washington, D.C., according to Edison Research.
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However, the overall result remains uncertain as several crucial battleground states are still too close to call, with some expected to take hours or even days to finalize.
The uncertainty surrounding the election contributed to a rally in U.S. stock futures and the dollar in Asian markets. Oil prices appeared to be following the broader market trend, falling in tandem with the strengthening of the U.S. dollar.
Warren Patterson, head of commodities strategy at ING, noted that oil prices were under pressure due to the rally in the U.S. dollar, which often impacts commodities priced in the greenback.
He added that oil prices could remain volatile as the election unfolds and more clarity emerges.
In a separate note, ING analysts suggested that a victory for Trump could lead to short-term price increases, driven by the potential for stricter sanctions on Iran.
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On the other hand, if Harris were to win, the status quo in U.S. foreign policy and energy regulations would likely continue, keeping oil prices relatively stable.
As the election results continue to be counted, oil markets are expected to stay reactive, with traders closely monitoring developments for signs of how U.S. energy policy could evolve under either candidate.