Crude Oil dips as Trump secures win in presidential election

• Crude Oil drops over 2.5% on the back of the US presidential election outcome. 
• Tropical storm Rafael fades into the background as Trump secures a new term as US President. 
• The US Dollar Index rallies firmly and gains nearly 2% on Wednesday. 

Crude Oil slides lower and drops nearly 3% on Wednesday following the US presidential election outcome, which fell in favor of former President Donald Trump. One of Trump’s promises in the campaign running up to the election was to support and open up more drilling for Oil to become a bigger net producer. This would create another imbalance in the markets between supply and demand, with Oil prices likely to trade lower than current levels. 

The US Dollar Index (DXY), which tracks the performance of the Greenback against six other currencies, rallies and gains nearly 2% on Wednesday, not only on the back that Donald Trump has secured a fresh term. The fact that the Republicans have a chance of controlling the House of Representatives after getting control of the Senate means that Trump would have complete control of the decision system and could get several packages, reforms, and tariff implementations done without any issues. 

At the time of writing, Crude Oil (WTI) trades at $69.70  and Brent Crude at $73.44.

Oil news and market movers: Bullish elements helping out

• Tropical storm Rafael is on a path that could intersect in the next five days with BP, Shell, Occidental, and Chevron rigs in the US Gulf region, based on data from the Bureau of Ocean Energy Management and the National Hurricane Center. Bloomberg calculates that roughly 1.7 million barrels would be taken out of production daily. 
• Russian data show crude production in October was almost in line with its target under the OPEC+ agreement, according to people familiar with figures from the Energy Ministry, Bloomberg reports.
• Saudi Arabia lowered its Oil prices for buyers in Asia for December after members of the OPEC+ producers group said on Sunday they will delay production increases by one month, Reuters reports. 
• At 15:30 GMT, the Energy Information Administration (EIA) will release its weekly crude report for the week ending on November 1. Expectations are for a build of 1.8 million barrels compared to the previous draw of 0.515 million barrels. 

Oil Technical Analysis: There it goes

Crude Oil prices edge lower on Wednesday since former US President Donald Trump emerged as the winner of the US presidential election. In one of his last rallies, Trump confirmed that he wants to boost drilling and mining in the US again. That would mean that more Oil supply is set to hit markets and create another break in balance, with more supply than demand at hand. 

On the upside, the hefty technical level at $74.30, with the 100-day Simple Moving Average (SMA) and a few pivotal lines, is the next big hurdle ahead. The 200-day SMA at $76.85 is still quite far off, although it could get tested in case tensions in the Middle East arise. 

The 55-day SMA at $70.87, has lost control of the situation and is no longer supporting prices that have drifted too far off. Traders need to look much lower at $67.12, a level that supported the price in May and June 2023. In case that level breaks, the 2024 year-to-date low emerges at $64.75 followed by $64.38, the low from 2023.

US WTI Crude Oil: Daily Chart