Crude oil fell 10% after the US election results, know why such a big drop in the oil market?

Crude Oil Price: Every time there is a major upheaval in American politics, it affects the pockets of the entire world. Recently, the results of the US mid-term elections have changed the picture of global markets. Donald Trump’s Republican Party has suffered a heavy political loss in these elections. On the other hand, the Democratic Party has strengthened its lead in both houses of the US Parliament. As Washington’s power equation shifted, crude oil prices in the international market were scattered like a house of cards. The impact of this political shift is clearly visible in financial markets around the world.

Fall in crude oil prices

Heavy selling pressure was seen in the crude oil market after the election results. If we look at the latest market data, oil prices have seen a direct decline of about 10 percent. The price of American crude oil (WTI) fell almost 10 percent to $87.68 a barrel. At the same time, the price of Brent crude, considered the international standard, has fallen drastically. Brent crude fell 9.20 percent to $93.40 a barrel from $94.08 a barrel amid market volatility.

Expectations of talks with Iran changed the market mood

Not only US domestic politics but also foreign policy expectations are working behind this sudden drop in oil prices. Market analysts believe that the strengthening of the Democratic Party in the US Parliament can change the foreign policy of the US. Investors hope that the US may now open the way for talks with Iran under the new political circumstances. If this happens, the fear regarding the supply of crude oil from West Asia will be reduced to a great extent. This expectation of an increase in oil supply has played the biggest role in driving prices down.

Stock markets around the world came alive

This major drop in crude oil prices has come as very good news for stock markets around the world. Due to expensive oil, the economy of many countries was burdened by inflation. Now due to falling prices, investors in the global market have breathed a sigh of relief. However, all the challenges for the market are not over yet. The ongoing geopolitical tensions in West Asian countries have not yet completely calmed down. The next steps of the US government in the coming days will determine whether this decline in crude oil will continue or not.