Oil Posts Biggest One-Day Fall Since April After Democrats Sweep the Midterms
WTI fell 8.3% to $88.12 and Brent 8.7% to $94.62 as traders bet the Democrats' midterm sweep makes a deal to end the Iran war more likely.
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Oil had its biggest one-day fall since April on Wednesday, after the Democrats' sweep of the House and Senate in Tuesday's midterm elections led traders to bet that President Donald Trump will now look for a deal to end the war with Iran.
US West Texas Intermediate crude lost 8.3% to close at $88.12 a barrel, and Brent crude, the international benchmark, fell 8.7% to settle at $94.62, CNBC reported. It was the first time Brent had been below $100 since 7 October, according to NBC News.
Vance blames the war
The move came after Vice President JD Vance blamed the war for the Republicans' losses. "The reason we lost is the war," Vance said in a social media post on Wednesday, CNBC reported. "The president himself said so last night."
Trump told the Financial Times on Tuesday that he had no immediate plans to strike Iran, according to CNBC.
"The elections are leading the market to conclude that Trump might now be inclined to make a deal," said Andy Lipow, president of Lipow Oil Associates, who told CNBC the Democrats may try to restrict funding for the war.
A sharp reversal in a week
The fall has been fast. Brent traded as high as $118 a barrel on Friday, and oil futures are down more than 14% this week, CNBC said. The market had gained more than 10% in October as traders priced in the risk of escalation after the elections.
Not everyone thinks the move will last. The sell-off "could be getting a bit overdone," said Rebecca Babin, senior energy trader at CIBC. A senior Iranian official also told Reuters on Tuesday that Iran and the United States remain far from a deal to end the war, Reuters reported via CNA.
Supply data did not explain the drop. US crude inventories fell by 865,000 barrels to 409.8 million barrels in the week to 30 October, the Energy Information Administration said, according to Reuters.
What it means at the pump
The national average price of gasoline was $4.12 a gallon on Wednesday morning, NBC News reported. Patrick De Haan, an analyst at GasBuddy, said oil's fall could bring it below $4 in the "days ahead."
The oil slide came on the same day as stock futures, AI shares and the dollar slid after the Democrats' sweep.
Whether the fall holds depends on what happens next between Washington and Tehran. With a senior Iranian official saying the two sides are still far apart, traders will be watching for any sign of talks, or of escalation.
This article is for information only and is not investment advice.
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