November 9, 2016 Read More →

Trump’s Election Seen as No Boon to Oil

Most observers believe that risky asset classes such as oil could be in for a turbulent period as markets digest Mr. Trump’s surprise triumph, though they will 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.

Other market watchers said that as long as there is uncertainty around what Mr. Trump’s foreign policies are going to be, especially with 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.”

Full article ($): Oil Choppy as Investors Gage Trump Presidency

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