OPEC's job has just become tougher with Trump win

Wed Nov 9, 2016 6:18am EST
 
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By Maha El Dahan , Rania El Gamal and Dmitry Zhdannikov

DUBAI/LONDON (Reuters) - OPEC's job of trying to prop up oil prices has just got much harder.

With Donald Trump winning the U.S. presidential election, the 14-country oil-producing cartel may have to battle a sourer outlook for the global economy and weaker demand for crude.

It also faces the prospect of increased U.S. oil output - a major bugbear for the Organization of the Petroleum Exporting Countries - given Trump's pledge to open all federal land and waters for fossil fuel exploration.

OPEC's internal dynamic could change, with Trump promising to 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 outcome of the U.S. election adds to the challenges for the oil exporters because it will likely lead to weaker economic growth in an already fragile global economy. And that means additional pressure on oil demand," Yergin said.

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.   Continued...

 
The OPEC flag and the OPEC logo are seen before a news conference in Vienna, Austria, October 24, 2016. REUTERS/Leonhard Foeger