US Election Outcome Not Yet Priced into Oil
Without an already clear winner, the U.S. election’s outcome is not yet really priced into the oil market.
That’s according to Rystad Energy’s head of oil markets, Bjornar Tonhaugen, who warned that the result of the election could definitely weigh on the price direction.
Tonhaugen, who highlighted that the market had boosted prices ahead of the election, outlined that the uncertainty of the presidential race could last and that excitement and anticipation could keep oil prices up.
“When the election is past us, we do not expect immediate legislation that will affect the market on day one, so traders will shift short-term focus to real fundamentals, demand and supply,” Tonhaugen said in a statement send to Rigzone.
“However, the election result could have an impact on prices, and a Trump victory -in contrast to a Biden one - could help price levels keep gains more easily. A Biden win could also mean -at some point- a boost in demand and in turn prices, but also carries a supply risk which could flip the positive effect,” Tonhaugen added.
The Rystad Energy representative noted that prices were up on a strong relief sign from U.S. crude inventories.
“A projected draw of eight million barrels per day is a surprise level, especially at a time when demand is increasingly under threat again due to Covid-19’s resurgence,” Tonhaugen said in the statement.
“U.S. storage levels and confidence that OPEC+ may after all postpone a planned output boost from January have brought enthusiasm in early trading today and have strengthened oil prices,” he added.
In separate statements on his official Twitter page a few hours ago, U.S. President Donald Trump said “we are up big” and claimed “a big win”. In a statement on his Twitter page at a similar time, Joe Biden said, “we believe we are on track to win this election”.
I will be making a statement tonight. A big WIN!— Donald J. Trump (@realDonaldTrump) November 4, 2020
We are up BIG, but they are trying to STEAL the Election. We will never let them do it. Votes cannot be cast after the Polls are closed!— Donald J. Trump (@realDonaldTrump) November 4, 2020
We feel good about where we are. We believe we are on track to win this election.— Joe Biden (@JoeBiden) November 4, 2020
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