By Kevin Baxter

Crude-oil prices were lower Wednesday after Donald Trump's surprise victory in the U.S. presidential race, but had recouped some of their earlier declines in Asian trading ahead of the announcement of the election result.

The decline in oil prices coincided with falls across stock markets in Europe and Asia and a rally in gold prices.

The January contract for the global crude benchmark Brent was down 1.0% at $45.58 a barrel while its U.S. counterpart West Texas Intermediate fell 1.2% to $44.42.

Most observers believe that risky asset classes such as oil could be in for a turbulent period as they digest Mr. Trump's surprise triumph, though they would eventually settle down.

"The fundamental issues affecting the oil markets such as oversupply and large global stockpiles are the same today as they were yesterday," said Edward Bell from the Dubai-based Emirates NBD bank. "The next two weeks may be a difficult time, but the greater geopolitical risks associated with some of Mr. Trump's more hawkish policies could lead to price spikes."

Mr. Bell said that, domestically, there was little Mr. Trump could do to bolster the oil industry as most of the regulations and laws were made at state level. However, his pledge to help the U.S. coal industry could have ramifications for domestic power generation.

Mr. Trump would likely give U.S. producers access to far more on and offshore plays than Mrs. Clinton would have, an S&P Global Platts report said.

Moreover, the president-elect is expected to abandon, or at least weaken, efforts by Environmental Protection Agency and the Department of the Interior to regulate methane emissions from oil and gas operations and could weaken future car and truck fuel-economy standards, the firm said

Other market watchers said that as long as there is uncertainty around what Mr. Trump's foreign policies are going to be, especially in regards to geopolitical hot spots like the Middle East, most money managers would eschew oil in favor of havens such as gold.

"[Mr. Trump] changes his mind so many times about his foreign policy, no one really knows what he is going to do," said Amrita Sen, chief oil analyst at the London-based Energy Aspects. "The markets hate uncertainty and havens such as gold and the [Japanese] yen will be looking good to many people now."

Meanwhile, the American Petroleum Institute said U.S. oil stocks increased by 4.4 million barrels for the week ending Nov. 4. The official figures will be released by the U.S. Energy Information Administration later today.

Oil prices have been weighed down by the prospect that the world's crude supply is ballooning, as the proposed production cut by the Organization of the Petroleum Exporting Countries is far from certain.

Nymex reformulated gasoline blendstock for December--the benchmark gasoline contract--was down 0.38% at $1.36 gallon, while December diesel traded at $1.43, 0.43% lower.

ICE gasoil for November changed hands at $419.50 a metric ton, down) 0.3%.

Write to Kevin Baxter at Kevin.Baxter@wsj.com

(END) Dow Jones Newswires

November 09, 2016 04:26 ET (09:26 GMT)

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