Trump Statements Help Depress Oil Prices
U.S. President Donald Trump’s statements last night have helped depress oil prices today due to the unprecedented political turmoil that could be coming.
That’s what Rystad Energy’s head of oil markets, Bjornar Tonhaugen, said in a statement sent to Rigzone on Friday, adding that a smooth transition of power is needed for stability and that the current situation “is far from smooth”.
The Rystad Energy representative outlined that the most immediate fundamental impact of the political chaos is a likely delay in U.S. fiscal stimulus negotiations, which he added will disappoint the needed boost in oil and energy demand in the United States. Tonhaugen noted that this was a clearly bearish factor, which may have already started being priced in today.
“President Trump’s press conference last night paves the way for political chaos in the coming weeks, which can rollover to markets, including energy and oil in particular,” Tonhaugen said in the statement.
“The uncertainty that this election is bringing, uncertainty not only on a result level, but also on a political stability one, is putting markets in a limbo. The political chaos is likely to last through the coming weeks, despite what seems to be playing out as a count-win for the Biden-Harris campaign, and will result in continued volatility,” he added.
“Uncertainty and the risk of recount claims and court cases will anyway keep markets on edge. But most likely markets will see through most of the noise and refocus quite soon on fundamental impacts of a likely change of presidency and still divided congress,” Tonhaugen went on to say.
In a press conference from the White House on Thursday evening, Trump stated that “if you count the legal votes, I easily win”. He added, “if you count the illegal votes, they can try to steal the election from us, if you count the votes that came in late, we’re looking at them very strongly”.
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