Oil prices surged 2% on Wednesday after data showed a large decline in U.S. crude oils amidst President Donald Trump claiming victory in the election with millions of votes still to be counted, according to Reuters. A Trump win is likely to have a bullish impact on oil due to Iran’s sanctions and his support for Saudi-led oil production cuts to support prices.
- There is a small likelihood that the current oil and gas tax incentives will be removed, even if Biden wins, due to the narrow victory margin and a probable Republic majority in the Senate.
- Oil prices also supported by the probability that OPEC and allies, including Russia, could defer planned output increases from January as the second coronavirus waves lower demand
- A contested result could spur a bearish outcome for oil and markets, while a Biden win would be bearish given his support for green policies and a softer stance on Iran.
Crude oil futures are currently gaining. CL! is up 3.48%