The Jan’25 Brent futures contract saw weakness this morning, trading from $75.20/bbl at 07:00 GMT down to $74.30/bbl at 11:20 GMT (time of writing). This selling likely highlights rising uncertainty as traders weigh in the likely impact of another Trump Presidency on the oil market. An added source of volatility comes from Hurricane Rafael, which has hit Cuba as a Category 3 hurricane. Rafael is presently expected to weaken before hitting the US Gulf Coast, with the threat to oil production declining to ~1.55mb/d – possibly contributing to today’s weakness. Finally, the market will also be shifting its attention away from the US election to interest rate announcements by the US Federal Reserve and the Bank of England, with both central banks expected to cut 25 basis points. In other macroeconomic news, German chancellor Olaf Scholz fired Finance Minister Christian Lindner and has said he would call a vote of confidence in his government early next year. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.33/bbl and $1.27/bbl, respectively.
