Brent crude oil futures was down 90 cents, or 1.2%, to $74.63 per barrel, while U.S. WTI crude tumbled 82 cents, or 1.1%, to $71.17 per barrel
Oil prices dropped more than 1% on Wednesday as the dollar firmed on market bets the U.S. presidential election could swing in Republican Donald Trump’s favour though the race was still too close to call, and as U.S. crude stocks rose more than forecast.
Brent crude oil futures was down 90 cents, or 1.2%, to $74.63 per barrel at 0450 GMT, while U.S. WTI crude tumbled 82 cents, or 1.1%, to $71.17 per barrel.
The initial signs have been favourable for the Republicans and while it’s still early days, U.S. yields and the U.S. dollar are both trading higher, said Tony Sycamore, an analyst at IG Markets.
This in turn is weighing on the crude oil price which has had a good run in recent sessions, he said.
Trump was last leading in the U.S. presidential election on Tuesday, having won 211 Electoral College votes compared with 145 for Harris, with a third of the vote counted. The outcome of the race however remains uncertain with critical battleground states unlikely to be called for hours or even days.
U.S. stock futures and the dollar soared in Asia on Wednesday, as investors leaned toward a Trump win.
A stronger U.S. dollar makes greenback-denominated commodities like oil more expensive for holders of other currencies, in turn curbing demand.
If Trump wins, it is bullish for the oil market in the short-term due to prospects of tighter sanctions on Iranian oil, according to Soni Kumari, commodity strategist at ANZ Research.
In the longer-term, however, it could be bearish as Trump’s policies will be supportive for the U.S. oil and gas industry, while trade protectionism may result in weaker demand, she added.
