LONDON – Crude oil futures remained steady on Thursday morning in European trading after Donald Trump’s election victory in the 2024 U.S. presidential race. Both key oil benchmarks showed little movement, despite initial market reactions.
As of 0945 GMT, January 2025 ICE Brent crude futures were priced at $74.62 per barrel, slightly down from Wednesday’s settlement of $74.92. Meanwhile, December 2024 NYMEX WTI futures were trading at $71.24 per barrel, down from $71.69 the previous day.
While a Trump administration is generally seen as more favorable to the fossil fuel industry compared to the Democratic alternative, oil prices initially dipped after the election results, driven by concerns over potential new tariffs and their impact on global trade. Analysts warned that tariffs could create a stagflationary shock in the U.S. economy, adding pressure to an already weak oil market outlook for 2025.
“Wells Fargo’s latest report suggests that Trump’s proposed 10% across-the-board tariffs, with a 60% tariff on China, could slow economic growth and intensify inflationary pressures,” the bank noted.
Geopolitical Risks and Market Fundamentals
The election results also raised concerns over geopolitical risks, particularly the implications for U.S.-Russia relations, the ongoing Russia-Ukraine conflict, and the Middle East. Some analysts predict that a Trump administration might increase sanctions on Iranian oil exports, tightening global crude supply.
On the fundamental side, crude markets have been buoyed in early November by stronger refining margins, especially for gasoil and jet fuel. Diesel and jet cracks have risen significantly since early October, with Asian, European, U.S., and West African markets all seeing higher premiums.
“Diesel and jet cracks have surged, reflecting strong demand, while fuel oil prices have softened in recent days,” said analysts at Sparta Commodities.
Despite the uncertainty introduced by the election, the overall refining outlook remains positive, which could continue to support oil prices in the short term.
