Saturday , 24 June 2017

World first Volunteer based News Agency

Oil world cautious on Trump’s next moveb

LONDON: Oil bigwigs are trying to figure out strategies to deal with the impact that President Donald Trump’s blizzard of plans to boost the US industry will have on the world market.
If Trump keeps his promises on lower corporation tax, oil sector deregulation and tax incentives on exports, it could lead to an influx of US crude oil — something, which may challenge the price rises of the last six months after two years of weakness.
At the International Petroleum Week conference in London, the new US administration’s policies were cited as one of the most influential factors on oil in 2017, along with growth of the Asian market and tensions in the Middle East.
Abhishek Deshpande, an analyst at French corporate and investment bank Natixis, told AFP that even if Trump’s policies were imposed, they would not necessarily be favorable to the US petrol industry.
“The oil producers may look at it positively, as it will make the US crude oil jump higher. But for the rest of the US, the refiners would feel the pain, and possibly pass on the impact to the public,” he said.
“For the rest of the world, the Middle East would have to find new markets, which means more crude to sell,” potentially lowering the price, he added.
Energy Security Analysis, Inc. (ESAI) President Sarah Emerson also warned that Trump’s ideas could be difficult to implement.
“All of that is working against the huge question about deficit, and some Republicans and all the Democrats would have to object,” she said during a speech at IP Week.
She said political change in the US “could bring about a marginal deterioration in our market.”
Trump could also tackle deregulation in the energy sector, wiping out the regulations put in place by his predecessor Barack Obama, without a vote in Congress.
Last but not least, oil industry insiders said Trump’s unpredictability in geopolitics could give rise to dramatic swings in the market.
“The most significant problem would be the tense relationship with Iran, but there is also Mexico,” Deshpande said.
The uncertainties surrounding the new US president did not seem to trouble Mohammed Barkindo, secretary-general of the Organization of the Petroleum Exporting Countries (OPEC).
“Republicans tend to like the oil industry. We welcome the new Republican administration,” he said, reminding his audience that the US is OPEC’s most important export market.
Oil prices
Oil prices fell on Friday after US crude inventories rose for a seventh week, showing that the market is still struggling to ease oversupply despite many producers’ efforts to rein in production.
US crude stocks rose by 564,000 barrels in the week to Feb. 17, the Energy Information Adminis-tration (EIA) said, though the increase was less than the 3.5 million barrels expected by analysts.
The continued rise in US inventories comes as members of OPEC and other producers have cut output.
Benchmark Brent crude oil was down 30 cents at $56.28 a barrel by 1149 GMT, while US West Texas Intermediate dropped by 26 cents to $54.19.
Signs have begun to emerge that traders are depleting storage levels that soared while oil prices were weak.
In the US, traders are draining the priciest storage tanks as strengthening markets make it unprofitable to store for future sale and as cuts in global production open export opportunities.