Oil prices rebounded on Wednesday as investors weighed the implications of Democratic gains in the US midterm elections for Washington’s approach to the war with Iran, with traders also finding support from an unexpected decline in American crude inventories.
Brent crude, the international benchmark, rose 76 cents, or 0.7%, to $104.36 a barrel by 0730 GMT.
US West Texas Intermediate crude gained 63 cents, or 0.7%, to $96.72 a barrel, reversing earlier losses.
The advance followed a difficult prior session, when Brent settled at its lowest level in nearly four weeks as traders assessed diplomatic efforts to end the wars in Ukraine and Iran.
Vote counting was under way after Democrats captured majorities in both chambers of Congress, ending Republican control for the remainder of President Donald Trump’s second term.
Markets were assessing whether the shift would alter the administration’s posture toward Iran and the broader Middle East conflict.
“President Trump’s conflicting signals, with military strikes continuing alongside statements downplaying further escalation, have made it difficult for traders to build strong directional conviction,” said Priyanka Sachdeva, head of market insights at Phillip Nova.
Analysts said the political uncertainty had encouraged some profit-taking after oil’s sharp October rally, but underlying supply risks remained intact. In particular, traders continued to monitor threats to shipping through the Strait of Hormuz, a critical artery for global crude exports.
An unexpected 5.27 million-barrel drawdown in U.S. crude inventories for the week ended Oct. 30 also lent support to prices, according to American Petroleum Institute data cited by market sources.
“I believe some profit-taking and reduction in speculative long positions are justified, particularly after the sharp rally in October,” Sachdeva said.
“However, the underlying supply disruption risks around the Strait of Hormuz have not disappeared.”
