Oil falls near four-week low as Ukraine, Iran peace talks

Oil fell about 1% on Tuesday, November 3, and reached its lowest level in almost four weeks in New York, according to InfoMoney, which cited Reuters. The movement reflects the assessment that the market is following peace negotiations aimed at ending the wars in Ukraine and Iran.

The retreat, however, does not eliminate a support factor. According to InfoMoney, the concern is that recent attacks in both conflicts could further disrupt the supply of the commodity. Investors, therefore, need to weigh two opposing forces at the same time: the expectation of an end to hostilities and the physical risk of lower supply.

In the political field, the midterm elections in the United States are seen as a test for Trump's Republican Party, which seeks to maintain control of Congress for the remainder of its second term. The dispute gains weight because the composition of the Legislature tends to influence the country's fiscal and regulatory agenda.

Independent polls and analysts consulted by the publication expect a victory for the Democrats in the Chamber of Deputies. The situation in the Senate, on the other hand, remains uncertain, which keeps the final design of Congress open.

What changes for the investor

If negotiations advance and supplies remain stable, cheaper oil could alleviate energy costs and increase caution with assets linked to the sector. Recent attacks, however, show that geopolitical risk can quickly reverse this situation. For those who follow Nasdaq, interest rates and the dollar, it is worth observing three variables: the progress of negotiations, the news about oil supply and the final composition of the Chamber and the Senate. None of them, in isolation, defines the direction of prices.

Automatically translated from Portuguese.