OIL: Crude Lower As US Dollar Rallies With US Election News

The US dollar has rallied in expectation of a Trump victory with the BBDXY index up 1.4%. This is weighing on dollar-denominated commodities, including oil. WTI is down 0.9% to $71.34, close to the intraday low, and Brent is 0.9% lower at $74.83/bbl. 

• The outcome of the US election remains too close to call but either way it is likely to impact energy policy going forward but also the current sanction environment and how they are enforced. Energy Aspects noted that enforcing sanctions on Iran would reduce global supply by around 1mn barrels.
• The other event being watched is the path of Tropic Storm Rafael. Currently it is threatening around 1.7mbd of production in the Gulf of Mexico, according to Bloomberg.
• Bloomberg is reporting that US crude inventories rose 3.132mn barrels last week after falling 0.573mn the previous week, according to people familiar with the API data. Gasoline inventories fell 900k and distillate 900k. The official EIA data is out later today.
• A clearer picture on the US election result should emerge as Wednesday continues. In terms of data, there are euro area final October services/composite PMIs, euro area September PPI and September German factory orders. The ECB’s Lagarde, De Guindos and Buch speak.