Solid Gold Berjangka - Global oil prices trended higher in trading on Wednesday (Nov 4) as investors assessed the potential impact of the U.S. midterm election results on Washington’s policy direction in the Middle East. Brent crude traded at approximately US$103.96 per barrel, while West Texas Intermediate (WTI) hovered around US$97.22 per barrel, amid ongoing uncertainty regarding the conflict with Iran.
A shift in control of the U.S. Congress could complicate the agenda of President Donald Trump’s administration; however, the market remains focused on whether Washington will pursue further military action against Iran or opt for a diplomatic resolution. This uncertainty has kept a risk premium embedded in the oil market.
Geopolitical tensions remain elevated following reports that the United States carried out what it described as a defensive strike against Iranian defense facilities on Qeshm Island, near the Strait of Hormuz. President Trump subsequently stated that Washington has no immediate plans for further strikes, while both the U.S. and Iran are currently reviewing new proposals from mediators aimed at narrowing their differences.
Nevertheless, Iran has indicated that the U.S. response regarding the conditions for reopening the Strait of Hormuz remains unsatisfactory. While Qatar continues to step up mediation efforts, the two nations appear far from reaching an agreement. A fresh attack on an oil tanker in the Strait of Hormuz has further heightened concerns regarding the security of global energy shipping lanes.
On the supply side, data from the American Petroleum Institute provided additional support for prices, showing a decline of 5.267 million barrels in U.S. crude inventories for the week ending October 30—contrary to expectations of a 2.1 million-barrel increase. As long as the risk of disruption in the Strait of Hormuz and uncertainty surrounding U.S.–Iran relations persist, volatility in both Brent and WTI prices is expected to continue. (srh)