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OIL: Crude Uncertain What Trump Presidency Will Mean For Sector

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Oil prices finished Wednesday little changed holding onto gains made earlier in the week. They trended lower as the US dollar strengthened on expectations of a Trump win of the US presidency (BBDXY +1.3%) but after reaching a low it rallied on assumptions that sanctions on Iran will be strengthened. However, Republican policy is likely to be more favourable to the oil and gas sector than the Democrats, which could drive a supply increase. 

  • WTI fell 0.1% to $71.90/bbl after reaching $72.58, but has started today lower at $71.78. Before yesterday’s rally the benchmark declined to $69.81. Recent higher prices seem corrective. Initial resistance is at $72.67, November 5 high, and support at $66.72, October 28 low.
  • Brent was weaker down 0.5% to $75.17/bbl following an intraday high of $75.90 and a low of $73.40 before that. Despite recent gains, the bearish theme remains intact. Initial resistance is at $76.08, October 24 high, with support at $70.28.
  • The enforcement of current US sanctions on Iranian oil could reduce global supply by around 1.3mbd, based on calculations from Rapidan Energy.
  • The EIA reported an increase in US crude inventories of 2.15mn barrels with gasoline up 412k and distillate 2.95mn. Refinery utilisation increased considerably by 1.4pp to 90.5%.
  • Risks to oil & gas production in the Gulf of Mexico from Hurricane Rafael persist with around 1.6mbd threatened. 
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Oil prices finished Wednesday little changed holding onto gains made earlier in the week. They trended lower as the US dollar strengthened on expectations of a Trump win of the US presidency (BBDXY +1.3%) but after reaching a low it rallied on assumptions that sanctions on Iran will be strengthened. However, Republican policy is likely to be more favourable to the oil and gas sector than the Democrats, which could drive a supply increase. 

  • WTI fell 0.1% to $71.90/bbl after reaching $72.58, but has started today lower at $71.78. Before yesterday’s rally the benchmark declined to $69.81. Recent higher prices seem corrective. Initial resistance is at $72.67, November 5 high, and support at $66.72, October 28 low.
  • Brent was weaker down 0.5% to $75.17/bbl following an intraday high of $75.90 and a low of $73.40 before that. Despite recent gains, the bearish theme remains intact. Initial resistance is at $76.08, October 24 high, with support at $70.28.
  • The enforcement of current US sanctions on Iranian oil could reduce global supply by around 1.3mbd, based on calculations from Rapidan Energy.
  • The EIA reported an increase in US crude inventories of 2.15mn barrels with gasoline up 412k and distillate 2.95mn. Refinery utilisation increased considerably by 1.4pp to 90.5%.
  • Risks to oil & gas production in the Gulf of Mexico from Hurricane Rafael persist with around 1.6mbd threatened.