Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

UPDATE 17-Oil edges higher after shock Trump victory for U.S. presidency

Published 2016-11-09, 03:24 p/m
© Reuters. UPDATE 17-Oil edges higher after shock Trump victory for U.S. presidency
DJI
-
CBKG
-
LCO
-
CL
-
DXY
-

* Oil rebounds despite recovery in US dollar

* Trump election win could put Iran nuclear deal on shaky ground

* U.S. crude stocks rose last week - EIA (Adds quote, closing prices)

By Scott DiSavino

NEW YORK, Nov 9 (Reuters) - Oil prices edged higher on Wednesday as stocks and the dollar bounced back from a huge early slide following Donald Trump's surprise victory in the U.S. presidential election.

Crude oil prices tumbled as much as 4.0 percent to near $43 a barrel, a near two-month low, late Tuesday night as it became clear U.S. voters picked Trump as their next president.

That selloff was part of a broad-based market reaction where investors late Tuesday night fled risky assets such as stocks .DJI and the dollar .DXY which have since recovered in value. MKTS/GLOB

Brent LCOc1 futures rose 32 cents, or 0.7 percent, to settle at $46.36 a barrel, while U.S. crude CLc1 gained 29 cents, or 0.6 percent, to settle at $45.27 per barrel.

"If you just look at today's close versus yesterday's close, not that much happened. But, there was a near $2 a barrel roller coaster ride in the middle," said James Williams, president of energy consultant WTRG Economics in Arkansas.

"Oil markets started to recover from their overnight lows once it became clear that Trump had won the election," Williams noted.

With the Trump victory, some analysts said there were supportive factors for oil prices such as a potential shift in U.S. policy toward Iran.

Trump has criticized the West's nuclear deal with Iran, an accord that has allowed Tehran to increase crude oil exports sharply this year. Iran said Trump should stay committed to the deal. Obama administration said it will remain committed to the Iran deal through its final months. remains to be seen whether U.S. President Trump will revoke the nuclear agreement with Iran that he has criticized so strongly," Commerzbank (DE:CBKG) said in a note.

"If so, oil prices would presumably rise."

Other analysts, however, said the Organization of the Petroleum Exporting Countries attempts to prop up oil prices just got much harder with the Trump win. oil-producing cartel may have to battle weaker demand for crude if global economic growth slows in the wake of Trump's victory, and on the prospect of increased U.S. oil output given Trump's pledge to open all federal land and waters for fossil fuel exploration.

In an attempt to boost prices, OPEC agreed in September to cut output, although investor doubts have grown that it will be able to implement the deal at its next meeting on Nov. 30.

Oil prices remain at less than half of their level of mid-2014, pressured by excess supplies.

Oil prices briefly tumbled on Wednesday after the U.S. Energy Information Administration released weekly data showing another build in U.S. crude inventories, but eventually the market looked past it.

EIA said U.S. crude stockpiles USOILC=ECI rose 2.5 million barrels last week, a million more than analysts had forecast. EIA/S

"The report is fairly neutral, and the market is accordingly having a muted response," said Matt Smith, director of commodity research at energy data provider ClipperData.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.