Oil rises as traders assess impact of Trump win on energy policies

Oil prices changed course to trade higher on Wednesday, after falling earlier in the session weighed down by fears of a tit-for-tat trade war, as Donald Trump clinched the United States election, while data showed U.S. crude inventories rose by more than expected, adding to demand concerns.

Nymex crude (CL1:COM) +0.31% to $72.2/bbl, while Brent (CO1:COM) +0.03% to $75.55/bbl. Both contracts fell over 2% each earlier.

U.S. natural gas futures (NG1:COM) +1.36% to $2.71/MMBtu.

As for oil stocks, U.S. oil producers are looking forward to fewer regulations on crude production under a Trump presidency, meaning higher oil supply and consequently lower prices.

A Trump win also means more sanctions on Iranian and Venezuelan barrels, potentially boosting prices.

“Conceptually, the impact of a potential second Trump term on oil prices is ambiguous, with some short-term downside risk to Iran oil supply … and thus upside price risk,” Goldman Sachs commodities analysts wrote in a research note Monday.

Trump’s policy proposals include the eliminating the Environment Protect Agency’s rule on electric vehicle standards, deregulating energy production and build a wide range of sources of electricity, and repeal the Inflation Reduction Act at least partially.

Meanwhile, the U.S. Energy Information Administration reported a larger-than-expected U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve), which were up by 2.1 million barrels from the previous week. At 427.7 million barrels, U.S. crude oil inventories are about 5% below the five-year average for this time of year.

What’s moving?

The energy sector (NYSEARCA:XLE) gained +3.75% as the broader market moved higher.

Among oil and gas companies, EQT (EQT)+7.9%, Baker Hughes (BKR) +7.75%, Targa Resources (TRGP) +6.73%, Halliburton (HAL) +6.31%, Schlumberger (SLB) +6.26%, Kinder Morgan (KMI) +6.5%, Marathon Oil (MRO) +4.53%, EOG Resources (EOG) +3.71%, APA Corp. (APA) +3.48%, ConocoPhillips (COP) +4.29%, Targa Resources (TRGP) +6.73%, Exxon Mobil (XOM) +1.38% and Chevron (CVX) +2.69%, were some of the biggest movers.

ETFs: (USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)