Oil prices fall sharply after US midterm elections, Brent near $99

NEW YORK: Crude oil prices fell sharply in the global market on Wednesday after the US midterm elections. Investors are waiting for Washington’s next move in the war with Iran.

At 11:19am in New York, Brent futures were down $4.50, or 4.3 per cent, at $99.07 a barrel. West Texas Intermediate fell $4.13, or 4.3 per cent, to $92.02. In the previous session, Brent had closed at its lowest level in nearly four weeks.

Donald Trump’s Republican Party lost control of Congress in the elections, with the Democrats winning the House of Representatives and the Senate. Trump acknowledged that the Iran war contributed to the defeat. He told the Financial Times that there was no plan to attack Iran immediately.

Iran’s Supreme Leader Mojtaba Khamenei said in a written statement that US hostility would continue regardless of which party was in power. A senior Iranian official told Reuters that the two countries were still far from an agreement to end the war. Qatar has stepped up its mediation efforts.

Experts differed. According to Dennis Kissler of BOK Financial, higher exports from the Middle East and Trump’s statement were putting pressure on prices, while Democratic control could raise the chance of a peace deal. Carl Larry of Enverus said he feared escalation more than a resolution.

According to Vortexa, Gulf countries’ exports of crude oil, condensate and refined products (excluding LPG) averaged 17.1 million barrels per day in October. In September they were 18.9 million. The current level is about three-quarters of the pre-war level. According to Bloomberg, the UAE is considering a third pipeline to carry oil out of the Strait of Hormuz.

According to the US Energy Information Administration, crude inventories fell by 865,000 barrels to 409.8 million barrels in the week ended 30 October. Analysts had expected an increase. Stocks of petrol and distillates also fell.