By Joseph Dahrieh,

Crude oil futures are looking for direction, starting the day lower after a volatile previous session following the U.S. election day. The market is grappling with several factors, including the diminishing threat posed by Hurricane Rafael, which caused significant disruptions in U.S. crude oil production. As the hurricane weakens and moves away from U.S. oil fields, the immediate concerns regarding output disruptions have eased. This risk reduction helped alleviate some of the upward pressure on oil prices, creating a more balanced sentiment. With supply disruptions less of a concern in the short term, the near-term outlook for global crude prices is relatively neutral to slightly bearish.

Meanwhile, oil prices found support earlier in the week from expectations that the incoming Trump administration might implement policies such as tighter sanctions on Iran and Venezuela, which could limit their oil exports and tighten global supply. However, this optimism was counterbalanced by growing concerns over weaker global demand. Data showing a 9% drop in China’s crude imports for October, the sixth consecutive month of declines, raised alarms about slowing consumption. Moreover, a rise in U.S. crude inventories added further downward pressure on prices, leaving the market in a state of uncertainty. Demand-side worries about slower global consumption suggests a bearish near to medium-term outlook for crude oil. In the coming months, weaker demand could outweigh the potential supply-side support, potentially further weighing on crude prices.

• Dahrieh, Managing Principal at Tickmill