CRUDE WRAP: WTI (Z6) SETTLES USD 7.97 LOWER AT 88.12/BBL; BRENT (F7) SETTLES USD 8.98 LOWER AT 94.62/BBL

The crude complex tumbled after the Democratic sweep reduced the likelihood of an extended US/Iran war. Meanwhile, Trump appeared more conciliatory after the midterms than expected, and the FT reported that he said the US has no immediate plan to strike Iran. WTI and Brent hit highs of USD 97.15/bbl and USD 104.96/bbl, respectively, in the overnight session, but swiftly pared and fell through the US session to settle around lows, as geopolitical rhetoric was constructive. Trump accepted the midterm result and acknowledged it is largely true that the Republicans lost because of the Iran war. In a conciliatory tone, he said he could work with the Democrats on many things and will probably get along with them, unless they want to be destructive. On the US political front, crude was also pressured by separate reports that War Secretary Hegseth could face impeachment by Democrats or dismissal by Trump, amid growing dissatisfaction within the military. However, Trump said War Secretary Hegseth is doing a very good job and he is not replacing him. The downside may reflect Hegseth being seen as one of the administration’s leading supporters of military action against Iran, so his potential exit could imply less appetite to continue the war. Meanwhile, House Democratic Leader Jeffries said they will pass a bill to stop Trump tariffs and end the war, while Senate Democratic Leader Schumer said they will end the war. On US-Iran, Al Jadeed later cited Arab diplomatic sources as saying the course of US-Iranian negotiations will become clearer on Friday and that significant progress has been made. While the tone is constructive at the time of writing, it is worth noting that the midterms had long been touted as a key date in the conflict, with any renewed action widely expected after the vote, a window that has now opened. It remains to be seen what Trump ultimately decides to do, but it appears nothing is planned as of yet. Elsewhere, in the weekly EIA data, crude and gasoline saw surprise draws, while distillates drew much more than expected. Crude production rose to 14.003mln from 13.992mln, while the SPR dipped to 282.2mln from 282.6mln. Lastly, the UAE is reportedly considering building a third crude pipeline to bypass the Strait of Hormuz.