Oil slumps after midterm election rebuke to Trump raises bets on Iran war exit
USO•Oil prices fell more than 8% after Republicans lost control of Congress, as investors bet the shift could hasten an end to the Iran war. Brent settled at $94.62 a barrel and U.S. crude at $88.12, both their lowest closes since Aug. 31.
1. Oil prices drop
Brent futures settled down $8.98, or 8.7%, at $94.62 a barrel, while U.S. West Texas Intermediate crude fell $7.97, or 8.3%, to $88.12. Both benchmarks closed at their lowest levels since Aug. 31.
2. War outlook remains uncertain
Investors bet that Democrats taking control of Congress could constrain President Donald Trump's military options and encourage a negotiated exit from the war with Iran. Gulf analysts cautioned that a deal seen as a defeat for Trump could also provoke escalation, while a senior Iranian official said the two countries remain far from an agreement. Qatar stepped up mediation efforts.
3. Supply and inventories
Gulf exports of crude, condensate and refined products averaged 17.1 million barrels per day in October, down from 18.9 million in September and roughly three-quarters of pre-war levels. U.S. crude inventories fell by 865,000 barrels to 409.8 million, despite analysts' expectations for an increase of 877,000 barrels.
