Oil prices recover after panicked speculators shorted on Trump win
North Sea benchmark Brent was trading flat at $46.03 per barrel at noon GMT. US benchmark West Texas Intermediate slid 0.14 percent trading at $44.84 per barrel.
“This is deja vu of the Brexit moment, very worrying,” said Bob Takai, president at Sumitomo Corp Global Research in Tokyo, referring to the market bloodbath that took place on the day when the United Kingdom voted to leave the European Union on June 23.
“Speculators are in a panic mode… Fears that Donald Trump was going to win the election saw risk-sensitive assets drop faster than Hillary Clinton’s hopes of becoming the next US president overnight,” said Fawad Razaqzada, market analyst at Forex.com, quoted by Reuters.
“Trump’s victory is seen as a ‘shock,’ prompting (investors) to seek safe-haven assets and this has pushed oil prices down,” said Son Jae-hyun, Seoul-based analyst at Mirae Asset Daewoo. He added that Trump’s policy on energy and anti-Iran views could push prices in future.
Also on Wednesday, the American Petroleum Institute (API) showed US crude reserves growing by 4.4 million barrels, also dragging down oil prices.
Official storage data by the government’s US Energy Information Administration (EIA) is expected late on Wednesday.
Russian Deputy Energy Minister Kirill Molodtsov said the country may increase oil production to 555-560 million tonnes by 2020 to retain its market share of 12 percent.