The US Energy Information Administration reported on Wednesday that inventories of crude oil, gasoline, and distillates in the United States declined last week, contrary to expectations.
The administration explained, in its widely followed weekly report, that crude inventories fell by 865 thousand barrels, reaching 409.8 million barrels in the week ending October 30, compared to analysts’ expectations in a Reuters poll of an increase of 877 thousand barrels.
The Administration also indicated that crude stocks at the delivery center in Cushing, Oklahoma, rose by 280,000 barrels during the same week.
Oil prices witnessed a noticeable decline following the issuance of the report. Global “Brent crude” (spot prices) is trading at $98.78 per barrel, a decrease of 4.6 percent, at 04:05 GMT, and American “West Texas Intermediate crude” also decreased by 4.5 percent to reach $91.85 per barrel.
The Energy Information Administration stated that the quantities of crude processed in refineries rose by 199,000 barrels per day during the week, while refinery operating rates rose by 1.7 percentage points to reach 94.5 percent.
Regarding gasoline, US stocks decreased by 222 thousand barrels, reaching 209 million barrels, contradicting expectations that indicated an increase of 153 thousand barrels.
Administration data also showed a decline in distillate stocks - which include diesel and heating oil - by 3.6 million barrels, to reach 99.3 million barrels, compared to expectations of a decline of 100 thousand barrels.
The Energy Information Administration also indicated that net US imports of crude oil increased by 1.18 million barrels per day.
US stocks rose strongly in Wednesday's trading, as investors tried to identify the companies and sectors that benefited from and were affected by the significant losses suffered by the Republican Party in the midterm elections, and the changes that the results may impose on the economic and trade policies of the administration of President Donald Trump.
The Standard & Poor's 500 Index jumped 1.1 percent in early trading, heading towards recording its best daily performance in six weeks, while the Dow Jones Industrial Average rose 983 points, and the Nasdaq Composite Index rose 1.7 percent. In the bond market, US Treasury bond yields declined.
The performance of stocks varies according to the implications of the electoral results for companies. Shares of First Solar, which operates in the field of solar energy, jumped, while companies linked to Trump ally Elon Musk were under pressure, with SpaceX shares falling by 5.8 percent to their lowest levels since August, and Tesla shares falling by 5.1 percent in early trading.
The shares of “Trump Media”, the parent company of the US President’s social media platform, also fell by 11 percent, recording its largest decline since August 10, in a reflection of the varying reaction of investors towards companies linked to the US administration and its allies.
The gains came after the elections produced a Democratic majority in both chambers of Congress, in a result that paves the way for a new phase of legislative resistance to Trump's program, which he has sought to implement intensively since his return to the White House.
Investors believe that the division of control over Washington between the Republican and Democratic parties may not be a negative thing for the markets, as it reduces the possibility of passing broad policy changes that may confuse the economy or affect the performance of companies.
Stephen Brown of Capital Economics said that the size of the gains achieved by the Democrats does not change much of the expectations related to policies in the near term, because the party still lacks a majority in the Senate capable of overcoming the legislative obstruction, while Trump retains the power to veto laws.
However, the implications of the results remain mixed across sectors. Some Asian markets fell briefly amid concerns that the rise of Democrats will slow the expansion of artificial intelligence projects, due to tightening safety considerations and local community resistance to the establishment of data centers. This comes at a time when investors are wondering whether the significant rises recorded in shares of artificial intelligence companies reflect a sustainable boom or bubble in the sector.
In futures trading before the opening of Wall Street, Dow Jones contracts rose by 1.4 percent, and Standard & Poor's 500 contracts rose by 1 percent, while Nasdaq contracts compensated for part of its previous losses related to artificial intelligence stocks, rising by 0.54 percent.
On the other hand, shares of wind energy companies rose, while shares of defense industries companies came under pressure, amid expectations that political developments will reduce the intensity of the war with Iran, which may limit the expected demand for defense products and services.
The political and economic picture is still open to multiple possibilities, as Trump retains broad executive powers in key files, including defense, foreign policy, and some aspects of trade.
