Oil prices fell again on Thursday. A barrel of American WTI crude oil cost $87.16, or 1.09%. less than before. In turn, a barrel of European Brent crude oil cost USD 94.20. Its price dropped by 0.44%.
It's another day of declines on the oil market. On Wednesday, raw material prices dropped by over 8%.
Despite the decline in oil prices, the market situation remains tense. In the United States, oil and fuel supplies have been decreasing for several weeks. According to the US Department of Energy (DoE), last week oil stocks decreased by 0.9 million barrels (0.2%) and amounted to 409.8 million barrels. This is the fifth week in a row in which a decline has been recorded.
There is also less gasoline. Its inventories decreased by 0.2 million barrels (0.1%), to 209 million barrels.
An even greater decline concerns diesel and heating oil. Stocks of these fuels decreased by 3.6 million barrels (3.5%) and currently amount to 99.3 million barrels.
The data regarding distilled fuels are particularly disturbing. Their inventories fell below 100 million barrels and reached the lowest level since 2003.
Despite the sharp decline in recent days, crude oil remains significantly more expensive than at the beginning of the year.
Since the beginning of the year, the price of a barrel of American WTI crude oil has increased by 51.6%. In turn, the prices of European Brent crude oil increased by 54.6%.
The further direction of price changes will largely depend on the development of the situation in the Middle East, the prospects for ending the conflict with Iran and the condition of the American fuel market.
One of the most important factors currently influencing oil prices are political events in the United States. The victory of the Democrats in the congressional by-elections raised investors' hopes for a change in American policy towards the conflict with Iran.
Democrats won a majority in both the House of Representatives and the Senate. They took over at least seven senatorial seats previously held by Republicans. They also won victories in key gubernatorial elections.
Their candidates won, among others: in North Carolina and Maine, as well as in states previously considered Republican strongholds: Texas, Kansas, Ohio, South Carolina and Iowa.
The election result could have significant consequences for Donald Trump's administration. Democrats will now be able to more effectively control the president's actions and block some of his initiatives.
Trump's policy so far has included, among others: tax cuts beneficial to business, while at the same time introducing tariffs and the United States' involvement in the war with Iran, which contributed to the increase in inflation.
However, the Democratic victory also raised concerns in markets about the possibility of tighter regulatory oversight of fast-growing economic sectors, including chipmakers.
However, speculations regarding the possible end of the war turned out to be more important for the oil market.
Democratic control of Congress could limit U.S. military spending and lead to a quicker end to the war with Iran, said Dennis Kissler, senior vice president of trading at BOK Financial Securities Inc.
On Tuesday evening, Donald Trump admitted that the war with Iran contributed to the Republicans' poor result in the elections. However, he noted that he did not regret carrying out the attack on this country and would make the same decision in a similar situation.
At the same time, the US president said that the greatest political burden for his administration is not the conflict itself, but the increase in oil prices.
The war led to increases in the prices of gasoline and diesel oil. Higher refueling costs caused dissatisfaction among American voters and became one of the administration's significant political problems.
