Oil prices jump as Trump declares victory prematurely
Oil prices jumped this morning after President Donald Trump falsely claimed to have won the US election with millions of ballots still to be counted.
Global standard Brent crude jumped two per cent to trade at $40.50 in the aftermath of Trump’s speech this morning.
US benchmark West Texas Intermediate also climbed by the same margin to trade at $38.40.
A win for the incumbent is seen as bullish for oil markets due to Trump’s hardline stance on Iran.
He also holds considerable sway among leading oil producers like Saudi Arabia, the de facto head of production alliance Opec+.
The producer group has been responsible for maintaining oil prices through the pandemic by committing to record production cuts.
Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB, said: “A win by Trump is bullish for the oil price as it will continue to keep Iranian and Venezuelan oil out of the market, and mean a continuation of the ties between Donald Trump, Saudi Arabia and Russia with the aim of healthy oil prices and a balanced market.”
Biden, on the other hand, is considered a bearish prospect due to his commitments to green energy policies, as well as doveish approach to Iran.
However, with a result possibly not guaranteed for several days, prices could yet change direction.
A bigger than expected draw on US inventories had also helped prices higher this morning, despite fears over surging numbers of new coronavirus infections.
Last week oil prices plunged around 10 per cent as a number of countries including the UK, Germany and France announced new lockdowns.
The tumble raised concerns that the market could see a repeat of the spring’s historic volatility.