Oil Rebounds as Election Shifts Rattle Energy Stocks

U.S. crude benchmark WTI gained 2.9% to $90.65, ending a three-session slide that had taken prices to a near two-month low. U.S. natural gas was little changed at $2.95 per MMBtu, while European gas advanced 1.9% to €89.72 per megawatt-hour.

The wider market remained under pressure. The S&P 500 fell more than 3% in afternoon trading and the Nasdaq dropped about 5% as a selloff in AI chip stocks deepened. Shares tied to Texas data centers fell after Democrat Gina Hinojosa defeated longtime governor Greg Abbott. CoreWeave slid 7%, while Nebius Group and Oracle each lost 4% in overnight trading Wednesday. Hinojosa has called for a pause on new data-center projects until safeguards for electricity, water and local communities are in place. Investors fear similar restrictions could slow the sector’s expansion when Democratic governors take office in January 2027.

Energy equities did not follow crude higher: the State Street Energy Select Sector SPDR ETF fell 1.6% to $62.50. Wednesday’s 8.7% plunge in Brent had reflected expectations that the election result could push President Donald Trump’s administration toward a deal with Iran and the reopening of the Strait of Hormuz. Those expectations weakened Thursday. Eurasia Group cut its estimated chance of a negotiated agreement to 10% from 20% and put the likelihood of renewed U.S. strikes at 60%. Iran’s navy said a tanker hit a mine east of the strait and caught fire. Trump acknowledged the war’s role in Republican losses but said the conflict had been worth it.

Democratic committee chairs are expected to use subpoena powers beginning in January to investigate the administration’s energy dealings. Potential targets include Venezuelan oil concessions to North American Blue Energy Partners, critical-mineral deals involving Cantor Fitzgerald, and the cancellation of nearly $8 billion in energy projects in states that voted for Kamala Harris. Separately, two of three Russian tankers carrying diesel to the U.S. under the Trump-Putin deal changed course, one heading toward Brazil and the other into the Mediterranean. “It’s clear there’s hesitancy here in bringing these barrels onshore just because of the implications of doing so,” Kpler analyst Matt Smith said.

Physical oil supplies in the Middle East have shifted into surplus for the first time since July as exports from Arab Gulf producers climbed. Saudi Arabia, the UAE, Iraq and Kuwait shipped a combined 15.53 million barrels per day in October, up 10%, according to Bloomberg-compiled tanker-tracking data. Saudi exports rose 13% to 7 million bpd, including a 35% increase in shipments from Yanbu to 3.07 million bpd. Iraq’s exports gained 9.5% to 3.35 million bpd, while Kuwait’s rose by a third to 1.44 million bpd. The data showed no Iranian crude exports for a second month under the U.S. naval blockade. Dubai crude for prompt delivery traded below later-dated cargoes, indicating near-term supply exceeded demand. The OPEC Reference Basket fell 6.4% to $96.87 a barrel in Wednesday’s selloff.

Clean-energy shares also retreated after a brief post-election rise. The iShares Global Clean Energy ETF dropped 2.4% to $16.20. Enphase Energy fell 8.5% to $28.86, Array Technologies lost 1.1% to $5.27, and First Solar gained 1.6% to $197.56.

Sunrun rose 13.3% to $9.96 after reporting third-quarter results well above analysts’ estimates. Revenue was $1.10 billion, up 52% from a year earlier and above the $757.53 million consensus. GAAP diluted earnings per share were $0.56, compared with an expected $0.16, while net income attributable to common stockholders reached $153.2 million. Direct-business installations increased 9%, and a record 75% included battery storage. About 32% of Sunrun’s float was sold short. Investors also anticipated that a Democratic-controlled Congress would help preserve and stabilize tax credits and clean-energy incentives under the 2022 Inflation Reduction Act.