EMEA News
A Clinton Win Not Enough To Offset Market Challenges, Say Observers
Even though analysts almost uniformly miscalculated the outcome of Brexit earlier this year, they are firmly convinced that Americans on November 8 will vote for Hillary Clinton as the next U.S. president – and this speculation caused Brent and West Texas Intermediate on Monday to settle up 57 cents to $46.15 and 82 cents to $44.89 respectively.
But it's doubtful Clinton will trigger anything more than a temporary uptick, say observers: "Will there be a larger rally after Clinton is elected? I'm not so sure," Reuters quoted David Thompson, executive vice president at Powerhouse, as saying.
He suggests that Clinton will win not because of her policies – many of which would restrict rather than bolster the U.S. energy industry – but because too many voters have a "fear of the unknown" regarding Republican hopeful Donald Trump, and therefore goodwill towards the democrats will be muted at best.
But regardless of who wins on Tuesday, fundamentals once again are more concerning to experts than politicians, and analysts note that WTI's rise was also helped by a weekly drop of 442,077 barrels at the Cushing, Oklahoma crude futures delivery hub for the week ending November 4; Reuters notes that analysts forecast total U.S. crude inventories rising 1.1 million barrels last week after a record rise the week prior.
Moreover, despite Mohammed Barkindo, secretary general for the Organization of the Petroleum Exporting Countries (OPEC), continuing to state that his cartel is committed to ratifying its loose deal to reduce output, more and more experts think an agreement will not be reached.
David Hufton, managing director of PVM Oil Associates, said in a note, "Market belief that OPEC can reach a credible deal has collapsed."
He cited record OPEC output in October and fighting between Saudi Arabia and Iran as well as Iraq and other members demanding to be exempt from the deal as the reasons for the pessimism.
No sooner did Hufton's remarks come to light than it was reported that Saudi oil shipments to Egypt have been halted indefinitely, supposedly due to festering political tensions.
Also delayed is a proposed visit by Tarek El Molla, oil minister for Egypt, to Iran, Saudi Arabia's main political rival, to strike new oil deals.
Last week, Jim Ritterbusch, president of Ritterbusch & Associates, said in a note, "We remain consistent in our long standing view that OPEC will be unable to patch together a deal capable of placing even a minor dent in global oversupply."
