The Daily BS • Bo Snerdley Cuts Through It!
The Daily BS • Bo Snerdley Cuts Through It!

Get my Daily BS twice-a-day news stack directly to your email.


Charles Payne flags dramatic oil-price plunge after Democrats sweep Congress

by

THE DAILY BS: HOW MUCH CAN YOU HANDLE?

SPARE ME THE BS (I’ve got things to do)

  • U.S. crude plunged 8.3% Wednesday, closing at $88.12 a barrel.
  • Charles Payne highlighted the dramatic market reaction following the elections.
  • Traders are betting Washington may now seek an exit from the Iran war.

LAY IT ON ME (I’ve got time)

Well, isn’t this interesting?

Republicans suffer a historic election defeat, Democrats take control of Congress, and suddenly the oil market starts behaving as though somebody discovered a gigantic new supply of crude.

Fox Business host Charles Payne has been examining the remarkable plunge in oil prices following Tuesday’s midterm elections. And the numbers are enough to make anybody who recently filled up their gas tank do a double take.

West Texas Intermediate crude, the American benchmark, dropped $7.97 a barrel Wednesday, settling at $88.12. That’s an 8.3% decline in a single trading session.

Brent crude, the international benchmark, fell nearly 9%, closing at $94.62. Just days earlier, American oil had been trading above $100 a barrel.

Payne addressed the market’s dramatic turnaround in his Thursday morning commentary, noting that Trump’s softer language about the Iran conflict helped send prices tumbling. He also pointed to something the markets had been paying attention to: improving commercial shipping through the Strait of Hormuz.

That’s the crucial waterway where disruptions from the Iran war have helped drive global energy prices higher. Payne’s assessment suggests investors may finally be focusing on developments that could reduce the danger of another supply shock.

And he noted that the reaction wasn’t confined to oil. “Cash isn’t leaving the market; it’s just rotating.”

In fact, Wednesday brought a substantial rally in American stocks, with consumer-related companies benefiting from falling energy costs and shifting investor expectations.

But here’s the political twist. The oil plunge came as Vice President JD Vance publicly blamed the war with Iran for Republicans’ catastrophic election losses.

“The reason we lost is the war,” Vance wrote Wednesday.

President Trump acknowledged that the conflict had hurt Republicans politically, although he insisted the military campaign had been worth pursuing. The financial markets apparently heard those comments and reached a conclusion.

Maybe Washington is finally feeling enough political pressure to bring this conflict to an end. According to Axios, energy analysts identified Vance’s remarks as an important catalyst for the sudden drop in crude prices.

Meanwhile, incoming Democratic congressional leaders are promising to use their new political leverage to pressure the administration to end the fighting.

And here’s the important part: The Iran war hasn’t ended. Traders are betting on a possible change in direction, not celebrating a peace agreement that already exists. In fact, analysts warn that oil could climb again if diplomatic efforts fail or hostilities intensify.

Still, the speed of Wednesday’s decline raises an uncomfortable question for Washington.

If simply increasing expectations of a negotiated settlement can knock nearly $8 off a barrel of American crude in one day, how much of the financial pain Americans have been experiencing is tied to the uncertainty surrounding this war? And what might happen to gasoline prices if that uncertainty finally disappears?

Payne has been watching the relationship between oil prices, market sentiment and the Iran conflict for months.

Now investors have delivered a rather dramatic verdict of their own. Washington may want to pay attention. Because voters have already made it painfully clear what they think about the cost of filling their cars.

DBS WIRE SOURCES (I have all day)

today’s hot news