Crude oil prices fall: DAX reaches record level

Following the US midterm elections, investors are hoping for a relaxation of the situation in Iran, although the situation remains tense. This is leading to a calming of energy markets and could dampen inflation in the long term.

The price of a barrel of Brent crude oil from the North Sea has fallen by about twelve percent in the last four days and currently stands at around $97. Two weeks ago, it temporarily exceeded $117. US oil (WTI) is also cheaper at around $88 per barrel and has fallen by more than 13 percent within a week, according to data provider Infront.

At some gas stations, Super E10 is temporarily costing less than two euros per liter. In the nationwide average, the price for a liter of Super was 2.09 euros yesterday, while a liter of diesel was traded at 2.26 euros.

The German government is planning to introduce a price cap due to the high fuel prices, the exact design of this measure is currently being discussed by the coalition.

The decline in oil prices is mainly due to the Republican defeat in the US midterm elections, which reduces the likelihood of further US attacks on Iran. However, a diplomatic solution is not in sight, and there continues to be mutual attacks. Kyle Rodda from Capital.com warns, however, that peace talks currently consist mainly of rhetoric. He also expresses concern that a weakened President Trump might act more risky in foreign policy in order to exert influence.

Analysts therefore continue to expect strong fluctuations in oil prices. The world’s strategic oil reserves have also shrunk significantly.

The falling oil price is also boosting the stock markets, along with positive industrial data. The DAX reached a record high of around 26,671 points. On Wednesday, the German stock index had already gained more than two percent. The US leading index Dow Jones Industrial also rose sharply after the clear gains of the Democrats in the House of Representatives and the Senate.

Although the Democrats cannot easily reverse the policies of President Donald Trump, they are likely to be able to slow down his plans more. The election result is viewed positively by analysts because it was quick and clear and reduces the risk of surprising political decisions. “The stock market loves predictability and rises,” explains Jochen Stanzl from Consorsbank. The rapid acceptance of the election result by US President Donald Trump also contributed to the relief.