After Donald Trump secured the US presidency early today Wednesday, November 9th, 2016, many Middle Eastern construction and oil & gas industries commentators were first surprised and then unsure as to how this new White House administration would affect the region’s construction and hydrocarbon markets in the MENA and the GCC in particular. In few words, the election of Donald Trump as the next U.S. president is certain to send shock-waves throughout the global development world as worries about his trade and climate change position give rise to doubts. The word that was early this morning passed around in the major big city centres of the Gulf was : “We have to exercise prudence at this stage”, before adding that there is always uncertainty after any elections. In any case it is common knowledge that “any uncertainty, in general, always has a negative impact on stock markets. Anyway soon after the news settled down, crude rallied this morning after having traded lower late last night. OPEC Faces New Challenges following Trump’s Win claimed Asharq Al-Awsat English. This is indeed to be seen but in the meantime here is the article.
OPEC’s job to support oil prices is now facing tough challenges with Donald Trump winning the U.S. presidential election.
The 14-country oil-producing cartel will probably have to fight a sourer outlook for the global economy and weaker demand for crude, in addition to the prospect of increased U.S. oil production.
OPEC’s internal dynamic could witness a change, with Trump stating earlier that he shall tighten policies on Iran just as oil companies begin slowly to return to the Islamic Republic.
“Buckle up your seatbelts for a more turbulent and uncertain global economy that is ahead,” Pulitzer Prize-winning U.S. oil historian Daniel Yergin, vice-chairman of the IHS Markit think tank, told Reuters. The latter saw that the outcome of the U.S. elections will add to the challenges for the oil exporters.
Oil prices fell almost 4 percent early on Wednesday but recovered to trade up slightly at around $46 per barrel by 1055 GMT LCOc1 [O/R].
OPEC will meet on Nov. 30 in an effort to curtail output and reduce the global oil glut that has seen prices more than halve since 2014.
OPEC sources said they expected oil to remain weak in the days and weeks ahead due to worries about the global economy and uncertainty about Trump’s policies for the Middle East.
Trump has promised to double U.S. economic growth but also pledged protectionist trade policies.
“This will have huge negative implications for Asia, given how much their GDP is tied to trade with the U.S. Hence it is negative for growth and oil demand, at least due to the uncertainty that Trump creates,” said Amrita Sen, of the think tank Energy Aspects.
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