Jakarta (Benchmark News) – World oil prices a bit higher on Wednesday (9/11/1999), as stocks and the dollar bounced back from a big decline in early trading after a surprising victory of Donald Trump in the U.S. presidential election.
The price of crude oil fell as much as 43 percent nearing 4.0 u.s. dollars per barrel, the lowest close for two months, on Tuesday late at night because it became clear U.S. voters took their next President as Trump.
Action selling is part of a broad-based market reaction, in which the investors on Tuesday late night pulled off risky assets such as stocks and the dollar’s value has recovered since then.
Brent futures rose 32 cents, or 0.7 per cent, being settled in 46.36 us dollars a barrel, while US crude oil rose 29 cents, or 0.6 per cent, being settled in 45.27 u.s. dollars per barrel.
“If you just look at the close today versus yesterday’s closing, not much happens. But, there is down up nearly two u.s. dollars per barrel in the middle of it, “said James Williams, an energy consultant and President of WTRG Economics in Arkansas.
“The oil market is starting to recover from their lowest position last night, after it became clear that Trump has won the election,” Williams noted.
With the victory of Trump, some analysts say there are factors that support oil prices as a potential shift in u.s. policy towards Iran.
Trump has criticized the West’s nuclear deal with Iran, a deal which has enabled Baghdad to increase oil exports sharply in mentahnya this year. Iran says Trump must remain committed to the agreement.
The Obama administration said it would remain committed to the agreement of Iran until recent months. “It remains to be seen whether the US President Trump will deprive Iran’s nuclear agreement with provider criticism it has been very hard,” Commerzbank said in a note.
“If that happens, oil prices will probably go up.” Other analysts, however, say efforts of the Organization of petroleum exporting countries (OPEC) to shore up the price of oil has just become much more difficult with Trump.
The oil producers cartel may have fought with weaker demand for crude oil if global economic growth slowed down in the middle of Trump’s victory, and because the prospect of an increase in u.s. oil production thanks to Trump promises to open all federal lands and waters for exploration of fossil fuels.
In an effort to boost prices, OPEC agreed in September to cut their production, despite the doubts of investors has increased that the cartel would be able to implement the agreement at the next meeting of 30 November.
The price of oil remains less than half from their level in mid-2014, depressed by oversupply.
Oil prices had fallen on Wednesday after the U.S. Energy Information Agency (EIA) weekly data released showed the addition of crude oil supplies in the U.S., but eventually the market looked past it.
The EIA said U.S. crude stockpiles rose 2.5 million barrels last week, a million more than analysts had anticipated…(Red)