A chance of stability?
There is some sense in which the oil and gas industry was hoping for a Trump victory two days ago; to begin with, a Trump administration came with promises of deregulation and expansion of drilling. However, this industry hopefulness was balanced with the trepidation that a Trump administration would signal to the rest of the world an unpredictability that is inherently bad for investor confidence, and thus markets of all kinds. And if the global economy slows, so too does demand for oil.
With the surprise election of Trump, the markets did indeed reel in shock. However, they largely leveled out after a day of turmoil. It’s too early to predict where crude prices will move in the near-to-intermediate term, and much depends on the success or failure of the OPEC deal this month. However, as Tsvetana Paraskova points out in today’s featured article from OilPrice.com, there is some chance of relative stability, once analysts and investors sort out the campaign promises and true intentions of a Trump energy program.
In our analysis, everything depends on the degree of stability that Trump can find it in himself to project over the next two weeks. If he can communicate to the world a softening of the strident claims he made on the campaign trail, and if he can reach out to major players in good faith and with some plausibility, he might just avoid scuttling the already fragile OPEC deal.