Oil prices continue to fall, DAX rises to record high

Oil prices have been falling for four days. Hopes for an easing of tensions in the Middle East are apparently growing on the markets. This could reduce pressure on energy markets and curb inflation concerns in the longer term. However, much remains uncertain.

Brent crude oil from the North Sea recently fell in price by around twelve percent. A barrel now costs around $97. Two weeks ago it was at times more than $117. US WTI oil is also currently cheaper at around $88 per barrel and, according to data provider Infront, has fallen by just over 13 percent within a week.

Prices also fell at gas stations: Super E10 sometimes cost less than two euros per liter at some gas stations. On average nationwide, a liter of Super cost 2.09 euros yesterday. The price for a liter of diesel was 2.26 euros, so this fuel remains significantly more expensive.

Because of the high fuel prices, the federal government is planning to introduce a price cap. The black-red coalition is still discussing the exact form of this measure.

The trigger for the decline in the oil markets is the defeat of the Republicans in the US midterm elections. Investors consider further US attacks on Iran to be less likely.

However, there is no diplomatic solution in sight. There are always mutual attacks. But market analyst Kyle Rodda at Capital.com brings a different perspective: The peace talks are currently primarily limited to rhetoric, he says. "At the same time, there is concern that an increasingly weakened President Trump could act more actively and potentially riskier in foreign policy if he still wants to exert influence and has fewer reasons for restraint," said Rodda.

Analysts therefore continue to expect strong fluctuations in oil prices. In addition, global strategic oil reserves have shrunk significantly.

The falling oil price is giving the stock markets additional tailwind. Together with positive industrial data, this is maintaining the euphoria after the US midterm elections and catapulting the German leading index upwards. The DAX temporarily reached a new record high of around 26,671 points. The German stock index had already gained more than two percent on Wednesday.

The US leading index Dow Jones Industrial also rose sharply in the middle of the week after the Democrats won significantly in both the House of Representatives and the Senate.

The Democrats cannot easily reverse the policies of Republican President Donald Trump. But they should at least be able to slow down his plans more.

The election result is positive for the markets for several reasons, explained Jochen Stanzl, analyst at Consorsbank. It quickly became clear and was clear. The now shared political power reduces the risk of surprising political decisions.

“The stock market loves predictability and is rising,” says Stanzl. The fact that US President Donald Trump had directly accepted the election results also provided relief.