Oil rates fall due to weak demand from US, stronger dollar amid election outcome

(MENAFN) Oil prices experienced a decline on Wednesday, primarily driven by a stronger U.S. dollar and early election results pointing to a likely victory for Republican candidate Donald Trump. Additionally, data showing weaker demand in the U.S., the world’s largest oil consumer, contributed to downward pressure on prices.

The international benchmark for oil, Brent crude, dropped by 1.6 percent, trading at US74.25 per barrel at 10:21 a.m. local time (0721 GMT), compared to the previous session's close of US75.46. Similarly, the U.S. benchmark, West Texas Intermediate (WTI), also fell by 1.6 percent, reaching US70.65 per barrel, down from US71.80 at the close of the prior session.

The decline was further supported by a report from the American Petroleum Institute (API), which revealed a 3.13 million barrel increase in U.S. commercial crude oil inventories. This exceeded market expectations of a more modest 1.80 million barrel rise. The build-up in crude reserves signals weakening domestic demand, which has contributed to the downward price trend. Official figures from the U.S. Energy Information Administration (EIA) are expected later, and if the increase in inventories is confirmed, oil prices may face further declines.

Market attention is also focused on the U.S. presidential election results, with initial polling showing Trump leading against Democratic candidate Kamala Harris. Experts suggest that a potential Trump victory could result in shifts in U.S. economic policies, which could influence commodity prices. If re-elected, Trump is expected to impose new tariffs, particularly on Chinese goods, while also focusing on tax cuts and boosting fossil fuel production, further affecting the oil market.

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