Oil rises 1% as investors digest US election fallout
Trump expected to ramp up sanctions on Iranian oil
Hurricane Rafael shuts 22% of Gulf of Mexico oil output
Fed cuts interest rates by a quarter point
China's October crude oil imports fall
Updates prices and market activity to settlement; adds comments in paragraph 5, 6
By Nicole Jao
NEW YORK, Nov 7 (Reuters) -Oil prices rose nearly 1% on Thursday as the market weighed how President-elect Donald Trump's policies would affect supplies and as drillers cut output while bracing for Hurricane Rafael.
A strong dollar and lower crude imports in China limited gains.
On Wednesday, the election of Republican former President Trump initially triggered a sell-off that pushed oil down more than $2 as the dollar rallied. Crude prices later pared losses to settle down by less than 1%.
On Thursday, Brentcrude oil futures LCOc1 settled up 71 cents, or 0.95%, at $75.63 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 rose 67 cents, or 0.93%, to $72.36.
Prices gained support on expectations thatTrump's incoming administration may tighten sanctions on Iran and Venezuela, said Andrew Lipow, president of Lipow Oil Associates, adding that this could take oil supply off the market.
"The market is now looking into what Donald Trump's policies might be and the market is reacting to that prospect," said Lipow.
In his first term, Trump put in place harsher sanctions on Iranian and Venezuelan oil. Those measures were briefly rolled back by the Biden administration but later reinstated.
Also supporting prices, the U.S. Federal Reserve cut interest rates by a quarter of a percentage point at the close of its policy meeting on Thursday. Interest rate cuts typically boost economic activity and energy demand.
Actual, supply cuts also lent support. In the U.S. Gulf Coast, over 22%, or 391,214 barrels per day, ofcrude oil production was shut in response to Hurricane Rafael, the U.S. Bureau of Safety and Environmental Enforcement said.
The dollar index .DXY eased nearly 1% but remained neara two-week high after surging following Trump's victory. A strong dollar makes oil more expensive for other currency holders and tends to weigh on prices.
Downward pressure also came from data showing crude oil imports in China fell 9% in October, the sixth consecutive month showing a year-on-year decline, as well as from a rise in U.S. crude inventories.
Reporting by Nicole Jao in New York and Alex Lawler in London; Additional reporting by Colleen Howe and Gabrielle Ng;
Editing by David Goodman, David Gregorio and Leslie Adler
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