As Donald Trump stunned the world by swooping to presidential victory, the oil markets were less victorious, as oil prices slipped below the $46 mark.
As it became clear that Trump was to be the next President of the USA on the morning of Wednesday, November 9, the oil markets plunged into a situation similar to that experienced when the United Kingdom voted for Brexit.
Brent crude, which is the global benchmark, fell by nearly 4% to its lowest prices in three months in Asian trading as it became clear that Trump was gaining against Hillary Clinton, although it recovered a little later.
Brent LCOc1 lost 47 cents, fetching $45.57 per barrel by just after 9:00 am GMT, and U.S. crude fell by 50 cents to $44.48.
Hussein Sayad, the chief market strategist at FXTM, told Reuters that the “economic and political turmoil” some expect from Trump’s reign is causing consternation among investors.
This summer, we saw previous panic in the markets, when the equally surprising decision to leave the European Union was made by the British people.
As well as a fall in oil prices, the Trump victory also caused a fall in the U.S. dollar, which could also have an impact on the oil markets now and in the future. Trump’s win could affect supplies, which have seen a global glut and a drop in demands effect global oil prices and put a strain on the likes of Shell, which makes Shell Tellus S2 M 46.