OIL PRICES: ABOVE $45
PLATTS wrote, crude oil futures nosedived in late afternoon trading in Asia on Wednesday as a hotly contested US election saw Donald Trump winning the race for the White House.
At 3:30 pm Singapore time (0739 GMT), January ICE Brent crude futures were down 64 cents/b (1.39%) from Tuesday's settle at $45.40/b, while the NYMEX December light sweet crude contract fell 59 cents/b (1.31%) to $44.39/b.
A Trump presidency is seen as uncertain and unfavorable for Wall Street and for US business dealings in general, analysts said.
"A Trump win is likely to create immediate uncertainty in financial markets, in particular placing equity markets under pressure. There would likely be a rush into safe-haven assets, US treasury bonds, gold, Japanese yen and the Swiss franc," said Alvin Liew, UOB senior economist.
The dollar fell across a basket of currencies as the Dollar Index lost 1.3% from Tuesday's close to 96.615 as of 0739 GMT Wednesday.
Asian equities were deep in the red, with the Nikkei plunging 5.36%, the Hang Seng Index down 2.39% and the Shanghai Composite Index edging lower by 0.62% at 0739 GMT.
"The markets were clearly not prepared for that we are seeing. That's why it is reacting the way it is," said Chris Weston, market strategist at IG.
Front-month ICE Brent had slumped more than 3.21% to $44.56/b at one point, while NYMEX crude dropped 3.71% to an intra-day low of $43.31/b, after early polling results showed Republican Donald Trump in the lead.
RETURN TO ADDRESSING OVERSUPPLY
Crude markets may take a day or two to work through the news before the focus returns to oil fundamentals and the issue of oversupply, analysts said.
"The initial reaction is to sell off everything -- take the risk off the table. The emerging trend has taken the market by surprise. The oil market might fluctuate over the next few days looking for direction. But eventually, the focus will shift to the OPEC meeting later this month," said Jeff Brown, president of Facts Global Energy.
American Petroleum Institute data out late Tuesday showed US crude oil inventories could have risen by 4.4 million barrels to 485.6 million barrels in the week ended November 4.
If confirmed by the more definitive Energy Information Administration report out later Wednesday, it will be the second consecutive weekly rise in US crude stocks, after a record build of 14.42 million barrels two weeks ago.
Oil market participants will also be tracking fresh rhetoric from OPEC leaders in the lead-up to their November 30 meeting, where the group of nations is due to deliberate on an oil deal that could potentially plug a supply glut that has been plaguing the market since 2012, said analysts.
The group of producers, whose members have individually been producing at record levels in a bid to secure market share, has committed to provide a plan to limit its output to 32.5 million-33 million b/d at the organization's next summit in Vienna on November 30.
Russian energy minister Alexander Novak has said that Russia was willing to freeze production for six months or more, instead of cutting output, but this was contingent on OPEC sealing an agreement first.
As the largest crude producer outside of OPEC, Russia's decision to participate in an output cut will have a substantial impact on whether the deal achieves its aim of getting rid of the surplus barrels in the market.
Russian crude production reached a post-Soviet high of 11.2 million b/d in October, data from the energy ministry showed.
Citi Futures' Tim Evans cautioned that with Russian and OPEC output reaching fresh highs in October, "we don't think a freeze is going to give the market much support."
|June, 22, 13:40:00|
|June, 22, 13:35:00|
|June, 22, 13:30:00|
|June, 22, 13:25:00|
|June, 22, 13:20:00|
|June, 22, 13:15:00|
U.S. EIA - Venezuela holds the largest oil reserves in the world, in large part because of the heavy oil reserves in the Orinoco Oil Basin. In addition to oil reserves, Venezuela has sizeable natural gas reserves, although the development of natural gas lags significantly behind that of oil. However, in the wake of political and economic instability in the country, crude oil production has dramatically decreased, reaching a multi-decades low in mid-2018.
U.S. BEA - The U.S. current-account deficit increased to $124.1 billion (preliminary) in the first quarter of 2018 from $116.1 billion (revised) in the fourth quarter of 2017, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit was 2.5 percent of current-dollar gross domestic product (GDP) in the first quarter, up from 2.4 percent in the fourth quarter.
WNN - There are 126 operational power reactors in 14 EU Member States, providing more than one-quarter of the bloc's total electricity production. In its Communication on the Nuclear Illustrative Program (PINC) published last year, the European Commission expects nuclear to maintain its significant role in Europe's energy mix up to 2050. This would require investment of some EUR40-50 billion (USD46-58 billion) in nuclear LTO by 2050.
REUTERS - Benchmark Brent crude LCOc1 was up 50 cents at $75.58 a barrel by 0835 GMT. U.S. light crude CLc1 was 50 cents higher at $65.57.