Don’t waste your time – keep track of how NFP affects the US dollar!

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Join the Facebook community of FBS!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Email tooltip

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

FBS Mobile Personal Area

FREE

View
Trading
Analytics & Education
About Us
Connect to live chat
Joe Biden's plan: implications for the oil market

Joe Biden's plan: implications for the oil market

Information is not investment advice

A quick take

1.png

As you can see, two days separate these headlines; and yet, they stand in direct contradiction. What’s on the table in the US oil sector and how may it affect the oil price?

A thorough look

One of the signature characteristics of the Biden presidency plan is environmental care. The US President said he wanted to make the US carbon-free by 2050. To achieve that, he’d need to transition the US economy from fossil fuels to other energy resources. That would require the US re-joining the Paris accord in the first place (to be re-affirmed on April 22  during the Earth Day meetings). Here are some of the central implications discussed in the media now.

  1. The US oil industry lives on a huge labor force. That’s why thousands of regular workers worry that Joe Biden’s plan may cost them their jobs. The US President’s administration responds that thousands more will be created in the course of the clean energy initiative so the contraction of the oil industry labor market will be by far set off by the expansion of the labor market of alternative industries.
  2. Under ex-President Donald Trump, the US became import-independent in oil consumption. However, Joe Biden’s plan may reverse it because the scaling down and gradual contraction of the US oil industry would be inevitable. As a result, the US may become dependent on oil-producing states again – at least, while it’s making its way to oil-free functioning in 2050.
  3. Even if the US completes the plan the best way possible and becomes 100% carbon-free at no cost, the rest of the world (with minor exceptions such as Europe) will keep going with oil for decades ahead. Specifically, 90% of the world’s carbon emission comes from outside the US. Therefore, while Joe Biden hopes to fight global climate change, the US cannot do that alone.

An oil trader’s look

As far as the oil market is concerned, the smaller the input of the US oil industry to the global market, the higher the price of oil will theoretically be. In this sense, OPEC may be very much interested in Joe Biden’s green economy efforts as it may not only give room to the cartel’s expansion but may push the oil price, too. However, in the long-run, this process will not go without much fluctuation on the way because if Joe Biden makes the American industry carbon-free. It will eventually need less oil than before. Hence, the global oil demand is expected to suffer from this side. Nevertheless, through 2021, the channel between $55 and $65 appears to be the mainland for the WTI oil price performance. $75 may also be approached by the price in case the uptrend of 2017-2018 repeats itself in the coming 12 months.

2.png

                                                                         Oil CFDs are available on FBS Trader

Similar

TripAdvisor: earnings report on August 5

What will happen? TripAdvisor, the world's largest travel platform, will present its earnings report for the second quarter on August 5 at 23:00 MT (GMT+3)…

Popular

Share with friends:

Choose your payment system

Visa
Mastercard
Maestro
Wire Transfer
Skrill
RAPID Transfer
NETELLER
Learn more

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later