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OIL: Crude Rallies As Impact Of New US Administration Unclear

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After falling only moderately on Wednesday in the wake of the US election result, oil prices have rallied today on a slightly weaker US dollar (BBDXY -0.1%) and better risk appetite supported by news of China state banks selling USDCNY onshore. WTI is up 0.7% to $72.20/bbl, close to the intraday high, while Brent is 0.8% higher at $75.52/bbl.

  • Today the prospect of additional China demand is offsetting the possibility that there will be an increase in US oil output and Russian exports under a Trump administration. US demand for energy could also be higher if policies designed to boost growth are implemented but that would also strengthen the greenback.
  • Last week’s US crude inventory build announced yesterday also doesn’t seem to be weighing on oil prices.
  • Hurricane Rafael has passed through Cuba but is expected to wane as it heads to the US coast. Around 1.55mbd of Gulf of Mexico production is now estimated to be affected, down from 1.6mbd, according to Bloomberg.
  • The Fed decision is announced today followed by a press conference with a 25bp rate cut forecast (see MNI Fed Preview). Preliminary Q3 US productivity/ULC, jobless claims and September consumer credit are also released.
  • The BoE also announces and 25bp of easing is expected. In addition, September German trade & IP, Q3 French employment and September euro area retail sales print. BoE’s Bailey speaks as well as the ECB’s Lane, Buch, Schnabel and Elderson. 
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After falling only moderately on Wednesday in the wake of the US election result, oil prices have rallied today on a slightly weaker US dollar (BBDXY -0.1%) and better risk appetite supported by news of China state banks selling USDCNY onshore. WTI is up 0.7% to $72.20/bbl, close to the intraday high, while Brent is 0.8% higher at $75.52/bbl.

  • Today the prospect of additional China demand is offsetting the possibility that there will be an increase in US oil output and Russian exports under a Trump administration. US demand for energy could also be higher if policies designed to boost growth are implemented but that would also strengthen the greenback.
  • Last week’s US crude inventory build announced yesterday also doesn’t seem to be weighing on oil prices.
  • Hurricane Rafael has passed through Cuba but is expected to wane as it heads to the US coast. Around 1.55mbd of Gulf of Mexico production is now estimated to be affected, down from 1.6mbd, according to Bloomberg.
  • The Fed decision is announced today followed by a press conference with a 25bp rate cut forecast (see MNI Fed Preview). Preliminary Q3 US productivity/ULC, jobless claims and September consumer credit are also released.
  • The BoE also announces and 25bp of easing is expected. In addition, September German trade & IP, Q3 French employment and September euro area retail sales print. BoE’s Bailey speaks as well as the ECB’s Lane, Buch, Schnabel and Elderson.