How Could Donald Trump Impact the US Energy Market?


Nov. 20 2020, Updated 2:59 p.m. ET

Donald Trump and the Republican party 

Donald Trump belongs to the Republican party. US crude oil production usually fell under Republican presidents. For more, read Part 2 of this series.

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Donald Trump and the US energy policy 

  • Donald Trump supports increasing the production of fossil fuels like coal, crude oil, and natural gas. It could support employment and benefit the economy. However, the crude oil glut since June 2014 caused crude oil prices to fall 60%. It led to a massive loss of oil and gas jobs.
  • He proposes to lift regulatory restrictions on crude oil and natural gas exploration and production.
  • He plans to bring more federal land under crude oil and natural gas drilling.
  • He supports the Keystone XL pipeline project. It will increase the crude oil supplies to the US from Canada.
  • Donald Trump supports the coal industry—one of the key sectors blamed for environmental pollution. Falling coal prices saw a wave of bankruptcies and job losses in the sector over the last few years.

Impact on US crude oil, natural gas, stocks, and ETFs

Donald Trump’s energy proposal implementation might increase US crude oil and natural gas production. It’s bearish for US crude oil (XLE) (XOP) (USO) (UCO) and natural gas prices. However, it could reduce the country’s dependency on imported energy.

Changes in crude oil and natural gas (UNG) (BOIL) (UGAZ) (FCG) prices can impact oil and natural gas producers like Chevron (CVX), ExxonMobil (XOM), Comstock Resources (CRK), SM Energy (SM), Gulfport Energy (GPOR), and Southwestern Energy (SWN).

Volatility in crude oil and natural gas prices also impacts ETFs such as the VelocityShares 3x Inverse Crude Oil ETN (DWTI), the iShares US Oil Equipment & Services (IEZ), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the Direxion Daily Energy Bear 3x ETF (ERY), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), and the Vanguard Energy ETF (VDE).

Read Major Banks Downgrade Crude Oil Prices despite OPEC Deal, World Bank Thinks OPEC Production Freeze Will Impact Crude Oil, and Will Crude Oil Prices Test 3 Digits Again? to learn about crude oil price forecasts.

For our ongoing analysis, visit Market Realist’s Upstream Oil and Gas page.


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