Brent declines following API forecast of US inventory build

The front-month ICE Brent contract has lost $0.97/bbl on the day, to trade at $74.35/bbl at 09.00 GMT.

PHOTO: An oil barrel with a downward arrow signifying Brent's price decline. Getty Images

Upward pressure:

Brent crude faces some upward pressure as global markets focus on the high-stakes 2024 US elections. As the US elections ballot counting continues, market participants brace for a Republican sweep, according to analysts.

“Oil prices have held relatively steady as markets await the outcome of the US election, in what is expected to be a very close race,” two analysts from ING Bank remarked.

For supply fundamentals, a victory for Republican candidate Donald Trump could see “stricter sanction enforcement” against Iran and support Brent’s price gains, ING Bank’s analysts said.

“If Trump becomes president, his policies are likely to be neutral to slightly bullish for the oil market,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Downward pressure:

Brent moved lower following the API projection of a bigger crude stock build in the US. Crude oil inventories in the US rose by 3.13 million bbls in the week that ended 1 November, according to the American Petroleum Institute (API) estimates.

The API projection exceeded market expectations of a 1.8 million bbls rise during the week.

A rise in US crude stocks indicates a possible slowdown in oil demand growth, which can put downward pressure on Brent’s price. The broadly followed US government data on crude oil stockpiles from the US Energy Information Administration (EIA) is due later today.

By Aparupa Mazumder

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