Clinton victory could be good for oil price
Presidential election is affecting prices
‘People are being anxious. We see gold going up and I think even the dollar is a little bit going down.’ – Mohammed Ali Yasin
Jitters over the outcome of the US Presidential Election are affecting oil prices more than the inability of OPEC to come to a deal on production output, a senior banker has suggested.
Mohammed Ali Yasin, Managing Director of National Bank of Abu Dhabi Securities (NBAD), also said that if Democrat Hillary Clinton wins there is likely to be “relief in the market”.
He was speaking on Dubai’s Bloomberg Markets Middle East programme yesterday as presenter Manus Cranny said analysts predict a 3 per cent upturn in markets if Clinton wins versus a “15 per cent downturn” if Republican Donald Trump clinches victory on November 8.
Last week, OPEC made little progress on an agreement to cut production during a meeting in Vienna. Any cut would likely result in a rise in oil prices.
Yasin told the programme: “I’m not sure what’s happening with oil prices is related to non-agreement of OPEC or the delay of agreement. I think the markets are now in a jittery mood because of the elections.
“The question that always comes to mind is if they reached an agreement five days ago would the oil prices have gone up? And I think my answer would be no. I think there is a risk kind off attitude with many of the investors now and a lot of that is coming out.
“Technically, I think we are still trading in an acceptable range… after breaking the $52 about ten days ago, we could be now between the $46-45 back to $51-52.”
He said the current market attitudes “really shows people are being anxious”.
Yasin said: “We see gold going up and I think even the dollar is a little bit going down.
“I think overall people are just staying on the outside and that means it could be good and bad depending on the results.”
He added: “If you get maybe a Clinton kind of win probably we may see a relief”.
Yasin said the US results may not necessarily have a long-term effect, “but we think initially that if Clinton wins there will be relief in the market”.
The banking chief also said he believes Saudi Arabia, the largest economy in the Middle East, could get by financially if oil prices remain at $50 per barrel. The kingdom has been huge public spending cuts over the past year as oil prices fell from $115 in 2014 to $27 at one point in January of this year.
Yasin said: “I think if this continues they are budgeting for that and they’ve cut down their expenditure over the past year and that could continue. It’s going to be tough times for a year or two but I think, yes, they can.”