Markets went into disarray, sending oil prices into turmoil as Donald Trump stunned the world by winning the U.S. presidential election reminding of Brexit earlier this year.
Oil prices take a dip
As Trump defeated Democrat Hillary Clinton in the bid for the White House, crude futures markets roared into action.
Bob Takai, president at Sumitomo Corp Global Research in Tokyo, said, “This is deja vu of the Brexit moment, very worrying”, referring to Britain’s surprise vote to leave the European Union last June, which led to market turmoil.
The falls in oil came as prices for gold, a traditional safe-haven for investors in times of high economic risk jumped, while the dollar fell sharply against a basket of other leading currencies .DXY.
Jameel Ahmad, vice president of market research at trading platform and research firm FXTM, said, “The threat of growth forecasts being downgraded at least over the short-term due to investor uncertainty in theory weakens demand for commodities like oil”.
“Trump’s victory is seen as a ‘shock’, prompting (investors) to seek safe-haven assets and this has pushed oil prices down,” said Son Jae-hyun, Seoul-based analyst at Mirae Asset Daewoo. He added that in the longer-term, Trump’s pro-oil sector policies and anti-Iran views could result in higher prices.
According to a report by the American Petroleum Institute (API), in physical oil markets, crude inventory figures rising by 4.4 million barrels was also weighing on markets.
The U.S. Energy Information Administration (EIA) is to publish official storage data late on Wednesday.
Iran’s crude oil exports are set to fall 7.5 per cent to 2.37 million bpd in November to a four-month low, as low seasonal demand in Europe takes the edge off its post-sanctions export bonanza.
Meanwhile, Russian Deputy Energy Minister Kirill Molodtsov told an industry conference on Wednesday that Russia’s oil production is expected to rise to 555-560 million tonnes by 2020. He added that Russia would keep its stake in the global oil market trade at the current 12 per cent.