Oil prices tumbled on Wednesday as vote counting showed Donald Trump edging close to winning the US presidential election, throwing world markets into turmoil in a result reminiscent of June's Brexit vote.
Crude futures markets roared into action, with trading accelerating as Europe joined Asia, as Trump surprised by defeating Democrat Hillary Clinton in a series of key contests and opening a path to the White House.
US West Texas Intermediate (WTI) futures fell to a session low of $43.07 per barrel, down more than 4 per cent from their last close and their lowest since September, before recovering to $44.18 a barrel by 0712 GMT.
Brent futures were down 1.7 per cent at $45.26 a barrel.
‘This is deja vu of the Brexit moment, very worrying,’ said Bob Takai, president at Sumitomo Corp Global Research in Tokyo, referring to Britain's surprise vote to leave the European Union in a referendum last June, which led to market turmoil.
‘Speculators are in a panic mode ... Fears that Donald Trump was going to win the election saw risk-sensitive assets drop faster than Hillary Clinton's hopes of becoming the next US president overnight,’ said Fawad Razaqzada, market analyst at Forex.com.
The falls in oil came as prices for gold, a traditional safe-haven for investors in times of high economic risk jumped, while the dollar fell sharply against a basket of other leading currencies.
‘Investors moved into complete 'risk off' mode ... Trump winning would have negative consequences on the price of oil,’ said Jameel Ahmad, vice president of market research at trading platform and research firm FXTM.
‘The threat of growth forecasts being downgraded at least over the short-term due to investor uncertainty in theory weakens demand for commodities like oil.’
Trump won the key battleground states of Ohio, Florida, North Carolina, and led Clinton in a series of other important states.
‘Trump's victory is seen as a 'shock', prompting (investors) to seek safe-haven assets and this has pushed oil prices down,’ said Son Jae-hyun, Seoul-based analyst at Mirae Asset Daewoo. In the longer-term, Trump's pro-oil sector policies and anti-Iran views could result in higher prices, he added.
Elsewhere, a report by the American Petroleum Institute (API) showed crude inventory figures rising by 4.4 million barrels was also weighing on markets.
Official storage data is due to be published by the US Energy Information Administration (EIA) late on Wednesday.
There are also surprise beneficiaries the elections.
The tumble in crude oil prices pushed Singapore's fuel oil refinery margins, traditionally a loss-making business, into positive territory for the first time since 2012 as refiners benefit from cheaper feedstock prices.
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