EBC Markets Briefing | Oil prices continue to fall after Vance questioned Iran war

Oil prices extended sharp declines Thursday after Vice President JD Vance distanced himself from Trump's war on Iran. He questioned its worth and blamed it for the sweeping midterm rout.

Oil prices surged as the market braced for a major post-election escalation, but fears eased after Trump told the media on Tuesday that he has no immediate plans to strike Iran.

Voters in traditionally conservative strongholds shifted decisively toward the Democrats, driven by mounting frustration over the war with Iran, surging inflation, and widespread dissatisfaction with Trump's leadership.

The global oil market surplus widened to 1.4 million bpd in October, up from September's estimated oversupply of 1.1 million bpd, according to JPMorgan's commodity research team.

But one source said the conclusion of the midterm elections leaves Trump insulated from further political fallout, making him more inclined to escalate the situation and order an attack on Iran.

US crude oil inventories declined for a fifth straight week, while distillate stocks plunged to their lowest level in over 20 years, according to the latest data from the EIA. That also flagged warning signs.

EBC Financial Group analyst says Brent crude has closed well below 50 SMA, signaling a dominant shift to a bearish regime. If it holds above the support at $93, a consolidation pattern may develop over the next few sessions.

Asset Recap

As of market close on 4 November, among EBC major products, 3M shares led gains after the company agreed to pay $7.35 billion to settle litigation by ‌people who said its "forever chemicals" injured them.

Gold prices jumped after the Democrats flipped both chambers. Investors sought safe haven assets amid geopolitical uncertainty and broader market volatility.

Goldman Sachs analysts noted that while state-backed support has provided a recent boost to Chinese equities, a lasting rally remains highly tentative due to sluggish trading volumes and lingering weak market sentiment.

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EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.