Oil prices closed lower on Wednesday as investors looked at a strong US dollar against the potential foreign policy plans of US President-elect Donald Trump that could impact global oil supplies.
Meanwhile, Brent crude futures were down 61 cents (0.81%) at $74.92 a barrel. U.S. crude oil West Texas Intermediate (WTI) fell 30 cents (0.42%) to $71.69.
Donald Trump's victory sparked a massive sell-off that pushed oil prices down more than $2 a barrel in early trading as the US dollar rose to its highest level since September 2022.
A stronger USD currency position makes commodities such as oil more expensive for holders of other currencies and tends to weigh on subsequent prices.
Senior analyst at Price Futures Group Phil Flynn said early selling enthusiasm had died down and he saw more upside than downside in the short term.
Additionally, a Trump re-administration could also mean that sanctions on Iran and Venezuela will be lifted and revive market confidence.
Iran is an OPEC member with production of around 3.2 million barrels per day or 3% of global production. However, signs of trouble are becoming more apparent as the crackdown on Iran is expanded.
His heavy support for Israel could also boost US crude oil prices as investors in potential disruptions to global supplies and Trump will continue to support arms aid for Israel.
