What Would Trump Do to Oil?

What Would Trump Do to Oil?What Would Trump Do to Oil?

With Donald Trump winning the US presidential election, OPEC may have to battle a sourer outlook for the global economy and weaker demand for crude.

It also faces the prospect of increased US oil output, a major bugbear for the 14-country organization given Trump's pledge to open all federal land and waters for fossil fuel exploration, Reuters reported.

"Buckle up your seatbelts for a more turbulent and uncertain global economy that is ahead," Pulitzer Prize-winning US oil historian Daniel Yergin, vice-chairman of the IHS Markit think tank, told Reuters.

"The outcome of the US election adds to the challenges for the oil exporters because it will likely lead to weaker economic growth in an already fragile global economy. And that means additional pressure on oil demand," Yergin said.

OPEC will meet on Nov. 30 in an effort to curtail output and reduce the global oil glut that has seen prices more than halve since 2014.

OPEC sources said they expected oil to remain weak in the days and weeks ahead due to worries about the global economy and uncertainty about Trump's policies for the Middle East.

"Oil is doomed," one of the sources said.

A second unnamed source said the OPEC meeting in November might fail to have a strong impact on prices even if it strikes a deal to limit output."I don’t think prices will go up much more than the current levels."

  Hazy Policy

Trump's energy policies have been limited in detail so far. But what he has said is seen as supportive for the share prices of US independent oil and gas producers as well as oil majors with large exposure to the US shale industry such as Chevron, ExxonMobil and Shell.

"Trump has vowed to lead a fossil-fuel revival to underpin job growth and has also put man-made climate change denial at the forefront of his energy policy," JBC Energy analysts said in a note.

Trump said he was in favor of removing oil-sector regulations, opening federal land to drilling, and vowed to revive a major trans-Canadian and trans-US oil pipeline project while pledging to support the coal industry.

The stocks of oil majors BP and Shell were down in line with the price of crude, while France's Total underperformed peers.

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