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For The Oil Market, Voting For Trump Or Biden Is A Spectacle That Hardly Affects The Price, According To The Swiss Bank Julius Baer
The price of oil is falling from its barrier of $38/barrel, but the causes must be seen beyond what is in the media spotlight regarding the elections involving Donald Trump and Joe Biden.
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According to Norbert Rücker, Director Of Economics And Cutting-Edge Research At The Swiss Bank Julius Baer, the suspense surrounding the vote in America captures our attention and shakes financial markets, including oil. However, while it absorbs much of our attention, the U.S. voting is primarily a secondary spectacle for the oil market and is unlikely to drive established trends whether Trump or Biden is elected.
Oil Supply Is Declining
The suspense about voting for Joe Biden or Trump in the United States causes some volatility in the oil markets. But after an initial increase, prices fell to $38 per barrel.
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Therefore, for analysts at this Swiss entity, “we still believe that the U.S. voting is primarily a sideshow that is unlikely to drive established trends.”
That said, the outcome of the Biden and Trump vote could be somewhat negative for the U.S. dollar, resulting in a slight tailwind for commodities in general.
And When It Comes To The End Of The Elections, What Will Happen?
Finally, the outcome of the elections between Biden and Trump carries some significant political risks, such as the potential reduction of tensions with Iran. The country’s return to the oil market, of course, would delay the normalization process, but it remains to be seen whether this will happen in volumes that overwhelm the oil market.
The oil market is expected to continue facing supply shortages, a trend that the official statistics from the U.S. continue to confirm, and market sentiment could only improve regarding today’s depressed levels.
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