Oil Market Takes Stock After Wild Trading in Election Aftermath

A day after Donald Trump’s shock U.S. presidential election victory whipsawed prices on some of the heaviest trading volumes on record, U.S. futures hovered above $45 a barrel as other commodities rallied. Crude erased earlier gains after the International Energy Agency said prices may retreat amid “relentless global supply growth” unless the Organization of Petroleum Exporting Countries enacts significant output cuts.

Traders are weighing the implications of the Republican presiding over a country that consumes more oil than any other and is one of the biggest producers too. Trump has promised independence from OPEC and some of his energy policies include opening federal lands for energy production and freeing up offshore areas to development. While investors took comfort from a conciliatory acceptance speech on Wednesday, a surge in U.S. crude stockpiles served as a reminder of the massive oversupply looming over the market.

“Prices could fall to $40 or perhaps a little bit lower, especially in the absence of a deal” by OPEC, Abhishek Deshpande, an analyst at Natixis SA, said in a Bloomberg Television interview. While President-Elect Trump may take measures to support the American oil industry, “U.S. production rising is only going to put further pressure on oil prices,” Deshpande said.

West Texas Intermediate for December delivery lost 4 cents to $45.23 a barrel on the New York Mercantile Exchange at 10:37 a.m. London time after earlier rising 0.8 percent. Prices closed up 0.6 percent on Wednesday, erasing a 4.3 percent slide as Trump’s pledge to unite divided political factions prompted a reversal in the knee-jerk sell-off. Aggregate trading volume on Nymex showed 1.768 million contracts changing hands, according to updated bourse data on Thursday.
more at:  http://www.bloomberg.com/news/articles/2016-11-09/oil-steady-as-trump-seen-supporting-business-friendly-policies

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