Donald Trump’s victory in the US presidential
election means his administration is likely to focus on domestic oil
projects, leading to a prolonged period of lower oil prices.
“Most likely under a Trump administration there will be less regulation,”
Fadel Gheit,
a senior energy analyst at Oppenheimer in New York, told New Europe by
phone on November 9, adding that the oil industry is very heavily
regulated in the US, including environmental impact laws.
“For all practical purposes, less regulation, faster growing economy
will definitely help oil prices. But at the end of the day, if OPEC has
overproduction no matter what happens in this country is really not
going to have a meaningful impact on prices or direction of prices in
the next few months,” Gheit said. The Organization of Petroleum
Exporting Countries is set to meet on November 30 to approve a plan to
cap the group’s production to between 32.5-33 million barrels a day.
Trump favours boosting shale production in the US. “Stronger support
of US shale oil and gas may impact OPEC and the price of oil – not only
he is hostile to OPEC, but his actions will increase US shale oil and
gas production, prolonging the glut and keeping prices down,” Cyprus
Natural Hydrocarbons Company CEO
Charles Ellinas told New Europe on November 10.
“Trump will primarily concentrate on US issues, such as abandoning
the Clean Power Plan to boost coal at the expense of renewables, cut
federal regulations to the benefit of oil, gas and coal, withdraw from
or limit support of the Paris Agreement, reverse internal energy and
environmental priorities, and generally boost oil, gas and coal within
the US,” Ellinas said.
Regarding Trump’s foreign policy, Ellinas said the new US president
might take a tougher line against the Iran deal, which could influence
development of Iran’s oil and gas.
“The Iranians will be in their best behaviour going forward,” Gheit
agreed. “Obama is a man of peace. Not Donald Trump. Because he made some
outrageous statement during the campaign, people are concerned that he
will use a nuclear weapon. Like that crazy ‘little kid’ in Korea, if he
doesn’t behave, I would not rule out that Trump would drop a bomb on
him,” Gheit said, referring to North Korean leader Kim Jong-un.
Gheit said Trump would also probably approve the Keystone XL
pipeline. “Most likely the pipeline from Canada will go through,” he
said. “If the US becomes a conduit to Canadian oil export through the
pipeline going into the US that will definitely level the plain field.
It will add more pressure obviously on OPEC because now North American
oil will be able to go anywhere in the world,” Gheit said, reminding
that the US lifted the export ban last year.
“You will see more acceleration of projects that have been delayed,
postponed or cancelled because of environmental opposition,” Gheit said,
adding that “drill, baby, drill,” was back on the table. He noted that
since Republicans have the majority in Congress as well as in the
Senate, Trump would control the direction of the country more than US
President
Barack Obama.
https://www.neweurope.eu/article/anti-opec-trump-wild-card-oil-prices/