Oil prices move in volatile territory as market try to guess what happens now that a politically untested Donald Trump emerges victories in the U.S. presidential contest. File photo by Monika Graff/UPI | License Photo
WASHINGTON, Nov. 9 (UPI) -- Crude oil prices moved in volatile territory to mirror global market trajectory after a politically untested Donald Trump won the contest for U.S. president.
Trump defied even the most savvy of pollsters to pass the threshold in the Electoral College needed to secure the presidency. As president, Trump said he'd move to rebuild a U.S. oil and gas sector suppressed by lower crude oil prices.
Trump made no comments on energy during his acceptance speech, but in the past vowed to break the United States off from oil from the Organization of Petroleum Exporting Countries and push for more domestic oil and gas production.
From shale basins in the Lower 48 to oil locked in the Arctic waters off the coast of Alaska, Randall Luthi, the president of the National Ocean Industries Association, said a Trump president would be a boost for net U.S. production.
"Unwise federal energy policy has kept approximately 87 percent of U.S. outer continental shelf closed to exploration for over 30 years," he said in a statement. "With the right policies in place, we can produce vastly more offshore oil and natural gas, not only for U.S. consumers, but for people around the globe as well."
Higher levels of U.S. crude oil production during the peak of the shale era pushed markets heavily toward the supply side and dragged the price of oil from above $100 per barrel in 2014 to below $30 per barrel in early 2016.
Oil prices crashed overnight along with Dow futures, bounced up slightly in overnight trading, but moved lower again at the start of trading in New York. The price for Brent crude oil was relatively unchanged from the previous session to open at $46.09 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was down 0.16 percent to start the day at $44.91 per barrel.
Olivier Jakob, the managing director at Swiss oil-market research group Petromatrix, offered a more nuanced market assessment in an emailed statement
"Emotions are running high but presidential powers in the United State are not the same as in Russia and there is always some difference between a campaign and the reality of governing," he said. "For oil we need to keep in mind that even though we are in a heavily supplied market, the spare production capacity at current prices is limited and there are a lot of unknowns about what will be the Trump position in the geopolitics of the Middle-East."
On the market side, the American Petroleum Institute reported another build in U.S. crude oil inventories, showing the market still favored the supply side. Next week, U.S. lawmakers are expected to take a position on expiring sanctions against Iran, one of the more productive members of the Organization of Petroleum Exporting Countries.
"This is the first thing that oil markets will have to monitor after the result of the U.S. elections," Jakob said.
Trump has said easing sanctions pressure on Iran was a bad move. Détente from the Obama administration has opened the oil doors somewhat to Iran, which has agreed to step away from its controversial nuclear program.