Oil prices rise after Democratic victory, energy stocks decline
Brent increased by 4.0% to $98.38 per barrel
The price of Brent recovered following a recent decline, while oil stocks continued to fall: the sector's ETF XLE lost value. WTI also rose, European gas prices increased, and American gas prices remained nearly unchanged.
The market reassessed expectations regarding the further actions of President Donald Trump's administration toward Iran. Eurasia Group lowered its assessment of the likelihood of a negotiated agreement and raised its assessment of the likelihood of renewed strikes. Against this backdrop, bets on a swift restoration of supplies through the Strait of Hormuz weakened.
The Democratic victory also impacted stocks of companies linked to artificial intelligence data centers. Following the victory of Democrat Gina Inojosa in the Texas gubernatorial election, investors fear restrictions on new projects. Inojosa advocates for a pause in their construction until electricity supplies, water resources, and protection of local communities are ensured.
Starting in January, Democratic committee chairs intend to use new powers to investigate the administration's energy deals. These include oil concessions in Venezuela, agreements on critical minerals, and the cancellation of energy projects in states where Kamala Harris won.
Two out of three Russian tankers carrying diesel fuel to the U.S. under the Trump-Putin agreement abruptly changed course: one headed toward Brazil, and the other toward the Mediterranean Sea.
The physical oil market in the Middle East shifted into a surplus for the first time since July. The combined October exports of Saudi Arabia, the UAE, Iraq, and Kuwait rose to 15.53 million barrels per day.
