Trump’s New Old Energy Order

On the face of it, Trump will be a friend to the oil business. That could actually be bearish for oil prices.In a glutted market, rolling back regulations (read: costs) and potentially opening up federal land to drilling would create more potential barrels over time. Exploration and production companies will no doubt welcome it anyway — growth is growth. Pipeline companies would also benefit. Refiners, meanwhile, will likely rejoice at the vastly reduced prospects of the Clean Power Plan’s restrictions on greenhouse-gas emissions being extended to them.The real wildcard is on the international scene. Trump’s platform of protectionism and resetting relations with adversaries such as Russia and allies such as NATO represents a decisive break in U.S. (and Republican) policy. For that reason, it may not happen, or only in part. From a macroeconomic perspective, though, it raises the risk of reduced trade, which would have a direct and negative effect on the engines of global oil demand, emerging markets.

READ MORE

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.