Oil trade has been significantly impacted in recent days due to the U.S. midterm elections taking place on November 3. Analysts at ING recently stated that the likelihood of a return to military tensions in the Middle East, particularly concerning Iran, has increased after these elections. If these tensions do not occur, oil prices are expected to decrease.
Factors Influencing Oil Prices
The Trump administration has repeatedly pointed to the possibility of resuming attacks on Iran in the days leading up to the elections. This has caused the oil market to be highly concerned about the resurgence of tensions. However, ING analysts such as Warren Patterson and Ewa Manty do not consider this likelihood to be certain and emphasize that if attacks do not occur, the market may gradually reduce its risk.
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For instance, they pointed out that even if no agreement is reached between the United States and Iran, there is a possibility of price reductions. If the market passes through the elections without any attacks on Iran, there is a chance that price risks may decrease.
Other Impacts on the Oil Market
However, the decrease in oil prices depends on the market's reaction to various news. Recently, reports have emerged indicating a significant return of oil from the Strait of Hormuz to pre-war levels. This news initially had a negative impact on prices, but with other reports about Iranian attacks on tankers reaching their highest levels this month, the initial negative impact has diminished.
Additionally, while the oil market is monitoring the situation, diesel prices have decreased due to reports of Russian diesel shipments to the United States. Analysts believe that the agreed volume to balance the market is insufficient, and diesel prices on the ICE platform have reached $70 per barrel, the lowest since early October and below previous highs for this month.
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