1. Trump to be 45th President of the United States of America.
Just before 3AM EST, Donald Trump was officially declared the winner of the 2016 presidential election, and the immediate question for most of us in the energy industry became, what does this mean for us? As results came in the Dow Futures market dropped over 750 points, but actually rallied to finish the night nearly 200 points higher than the day prior. The WTI benchmark for December crude oil futures was as low as $43.36 at one point but rebounded to $45.80 later that morning. The Russian Micex Index grew 2.2 percent and the Mexican Peso plummeted over 11 percent against the US Dollar. All in all, I’d say it was an interesting night, not giving us much insight into the future.
As we look to make heads or tails of what the future holds, a look at Trump’s stated policies regarding oil will help. Specifically, Trump has promised to reverse the Iran nuclear deal, which would restrict their oil production once more. If this happens it will definitely complicate OPEC’s talks scheduled for the end of this month. Trump has also commented that NAFTA is the worst trade deal ever signed and is planning to repeal or renegotiate. Generally, he raises the hopes of oil and natural gas producers, based on his boisterous support for the removal of regulations that many say hamper the industry. While we wait to see which plans he actually puts into action, the oil market will remain unpredictable.
2. Russia and Iran to meet on possible oil contracts.
Amir-Hossein Zamanina, Iran's deputy minister of petroleum for international affairs and commerce, stated that a delegation of Russian oil and gas companies are scheduled to visit the country this week for talks regarding possible oil contracts. This is further news resulting from the January lift of international sanctions against Iran. Since the restrictions have been lifted Iran's energy sector has become an aim for potential investment by international firms.
3. Not just Trump. Other political leadership changes to impact oil and energy.
Even with the Republicans keeping control of the house and senate, there are still some committee chairs that will change. Sen. John Barrasso (R-Wy.) is in line to succeed term-limited Senate Environment and Public Works Chairman Jim Inhofe (R-Okla.). Reps. John Shimkus (R-Ill.), Greg Walden (R-Ore.), and Joe Barton (R-Texas) have all expressed interest in replacing House Energy and Commerce Committee Chairman Fred Upton (R-Mich.).