Crude oil prices fell nearly 4%, bringing prices to about 43$ per barrel which is the lowest in two months after the U.S. election. The price drops are a result of investors dropping risky assets such as stocks .DJI and the dollar .DXY. Oil prices however bounced back Wednesday after it became clear that Trump had won the election. So overnight there was a 2$ rollercoaster dip and rise in the price of oil. Some analysts say with Trump there are supportive factors for oil prices such as shifting U.S. policy toward Iran. Although Trump has criticized the nuclear deal with Iran, which if revoked, oil prices would rise. Iran suggests Trump should stay with the deal and the Obama administration will remain committed to it through its final months. On the other hand, Trump's election is believed to make it more difficult for OPEC to raise oil prices because they may have to face lower demand of crude oil if global economic growth slows due to Trump's victory and his pledge to open all federal land and waters for fossil fuel exploration.
It's fascinating that the U.S. election was able to create a minor shock in the price of oil worldwide. There are many foreseen pros and cons that could affect the oil industry that it's hard to predict what may actually happen.
http://www.reuters.com/article/us-global-oil-idUSKBN134024
It is really fascinating because countries know they are bound to win or lose if anything drastic happens to the U.S. economy. I have read it on different articles that it is impossible to predict Trump's administration
ReplyDeleteI think it's interesting that the election can have such a strong impact on multiple things including the price of oil worldwide. I'm curious to see how Trump's policies and plans for the future will further affect these prices.
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