Borja Rubio is a Bachelor in Business Management & Administration by the Complutense University of Madrid. He is an expert in Management of Securities with Derivative Products by the BME (Spanish Stock Exchange). He holds a SIBE operator’s license and a MEEF operator’s license. He is also an Analyst at XTB Spain.
It’s a bad start for oil futures (expiring in December); the WTI barrel, a benchmark in the U.S., fell by more than $4.5, and Brent dropped by $4 in the first week of November (closing the week at $45.5 per barrel); which means a drop by more than 8.5 percent, levels not seen since the beginning of the year.
Speculations on possible breaches of the production slash agreement by OPEC countries and Russia was one of the key elements that had traders lean towards downturn expectations at the beginning of the week, with more pressure on Wednesday once positive data regarding U.S. stockpiles became known (14.4 million barrels when forecasts pointed at one million).
We begin this week with all eyes on the U.S. presidential election, to be held on Wednesday, which is an event that holds special relevance, in part due to the contenders’ very different stances. Clinton represents continuism, as in her energy policy, where she plans to focus on long term clean energy proposals, while Trump has not revealed a clear stance on the matter. A Clinton victory should not affect prices much, while it is more difficult to estimate possible effects if Trump wins, although it is true that his speech is quite protectionist.
Meanwhile, the week goes by with slight rises and certain ease at around $45 per barrel. At an operational level, we should keep an eye on the important $43 per barrel floor this week, from where we may see a rebound in the coming days.