Oil falls at the start of trading as investors await the results of the US midterm elections, even after data showed an unexpected drop in US crude inventories last week.
Brent crude futures fell 26 cents, or 0.25%, to $103.34 a barrel, while US West Texas Intermediate crude futures dropped 53 cents, or 0.55%, to $95.56.
Brent Crude Slips to a Multi-Week Low
In the previous session, Brent crude fell more than 1% to its lowest level in nearly four weeks, reflecting caution across global markets.
The move comes as traders continue to watch political developments in the United States, given the potential impact of election results on spending, fiscal policy, and energy demand.
Dollar Weakens Ahead of US Election Outcome
The dollar fell against most major currencies on Wednesday as markets waited for the outcome of the US midterm elections.
The euro rose 0.2% to $1.1212, while the yen strengthened to 158.30 per dollar in early trading.
The dollar index, which measures the US currency against six major peers, declined 0.2% to 101.7.
Bond Yields and Major Currency Moves
Benchmark 10-year US Treasury yields slipped four basis points to 4.919%, showing continued caution in financial markets.
Sterling rose to $1.3440 as traders awaited the Bank of England’s Monetary Policy Committee decision, with the central bank expected to raise interest rates for the first time since August 2023.
The Chinese yuan traded at 6.6673 per dollar in offshore markets, steady after Tuesday’s sharpest daily drop since May 15.
China’s Currency Policy Under Watch
The yuan’s move followed the People’s Bank of China’s decision to raise the foreign exchange reserve ratio that financial institutions must hold, a step aimed at slowing the currency’s appreciation.
Current market moves reflect three main factors:
– Awaited US election results
– Uncertainty over policy in major economies
– The effect of US data on energy and currency markets
Conclusion:
The latest moves highlight the caution gripping global markets, with the US election outcome remaining one of the key drivers for oil, currencies, and bond yields in the near term.
