The immediate response in the commodities space to the Republican’s clean sweep victory has been a bearish one - especially for industrial metals. Copper and silver fell over 4% each, tracking weaker iron ore prices, while gold was off by around 3%. Crude prices fell too but came sharply off their earlier lows. In light of Trump’s clean sweep, the crude oil forecast has turned modestly bearish as I will explain in this short article. Crude oil forecast undermined by Trump victory While campaigning, Trump promised to lift restrictions on domestic fossil-fuel production, and said he plans a wide range of tariffs on imported goods. Crude oil could come under pressure because of potential for increased drilling activity could lead to more US oil production. Today, the downside has been limited so far because of the risk rally with US indices hitting record levels. But oil is more likely to test recent lows I would say, and the trigger would be if WTI breaks Friday’s low around $69.29. As well as increased drilling in the U.S., and a stronger U.S. dollar, tariffs could hurt demand in key markets such as China. If commodities remain under pressure given Trump’s promise of tariffs on imported goods, especially from China, this should also be a factor that crude oil traders will take into account. Industrial metals could be a particular weak spot and we have seen copper and iron ore being hurt sharply today. The stronger USD and yields are also hurting gold as the opportunity cost of holding the non-interest-bearing asset climb. There is now the risk that the FOMC may slow its rate-cutting pace. This is because inflation may re-ignite with Trump’s policies. If interest rates remain high, this could ultimately weigh on demand for oil.