Brent crude oil futures declined 48 cents, or 0.6%, to $74.44 a barrel on Thursday
Oil slid on Thursday, extending a sell-off triggered by the U.S. presidential election, as a strong dollar and lower crude imports in China outweighed supply risks and output cuts caused by Hurricane Rafael.
Donald Trump’s election win initially triggered a sell-off that pushed oil down more than $2 as the dollar surged. But crude prices later pared losses to settle at a less than 1% decline by the end of Wednesday’s session.
Brent crude oil futures declined 48 cents, or 0.6%, to $74.44 a barrel by 1040 GMT on Thursday. U.S. WTI crude slid 61 cents, or 0.9%, to $71.08.
Downside factors include a strong dollar and sluggish demand, while upside pressures come from potentially increased sanctions on Iran and Venezuela under Trump, as well as conflict in the Middle East, said Saxo Bank analyst Ole Hansen.
Some of these potential drivers will have no impact in the foreseeable future, but they all add up to the current narrative leading to rangebound trading, he said.
Absent any major geopolitical escalation, the short-term outlook leans toward downside risk in my opinion, he said.
The dollar held near four-month highs on Thursday as investors braced for several central bank decisions. A strong dollar makes oil more expensive for other currency holders and tends to weigh on prices.
Historically, Trump’s policies have been pro-business, which likely supports overall economic growth and raises demand for fuel, said Priyanka Sachdeva, senior market analyst at Phillip Nova. However, any interference in the Fed’s easing policies could lead to further challenges for the oil market.
Further downward pressure came from data showing that crude oil imports in China declined 9% in October – the sixth successive month showing a year-on-year drop – as well as from an increase in U.S. crude inventories.
