Oil prices fell on Wednesday as the U.S. dollar rallied on Donald Trump’s election as president.
Investors believe a Trump presidency will bolster the dollar as interest rates may need to remain high to combat inflation resulting from any new tariffs and polices that may further pressure China’s economy, weakening demand there.
Brent crude oil futures were down $2.01, or 2.66%, at $73.52 U.S. per barrel, while U.S. West Texas Intermediate (WTI) crude fell $2.08, or 2.89%, to $69.91 U.S. per barrel.
Independent analyst Tina Teng said that besides a surging dollar weighing on commodity prices, a Trump presidency could see policies that may further pressure the Chinese economy, weakening oil demand in the world’s top crude importer, said .
The dollar was set for its biggest one-day rise since March 2020 against major peers as so-called "Trump trades" took off.
A stronger U.S. dollar makes greenback-denominated commodities such as oil more expensive for holders of other currencies.
