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Election 2020: What a Joe Biden presidency would mean for oil

Ines Ferré
·Markets Reporter
·2 min read

No blue wave under a possible Biden presidency may make it harder to pivot towards a greener economy — keeping fossil fuels around for longer, says one oil analyst.

“The president, if it is indeed Biden, he could scale back drilling on public lands — that is a possibility. There’s other measures that he could take to stop the progress of fossil fuels ... but in general, green energy will struggle with a Republican Senate ” said Bob Yawger director of energy futures at Mizuho Securities.

On Wednesday when it seemed like Congress would be split, US crude oil futures (CL=F) gained 4% as presidential election results were still being counted.

“You're seeing a bid in the market on assumptions that he's [Biden] going to struggle to go green. That implies that we'll have fossil fuel in the mix here in the United States for some time to come,” Yawger told Yahoo Finance Live.

Pump jacks are shown in an oil field, Wednesday, July 29, 2020, in Midland, Texas. (AP Photo/Tony Gutierrez)
Pump jacks are shown in an oil field, Wednesday, July 29, 2020, in Midland, Texas. (AP Photo/Tony Gutierrez)

“A Republican Senate also implies that taxation is not going to be an easy goal for Biden either. And that would also be a positive demand indicator for crude oil,” he went on to say.

On Thursday some solar energy stocks, such as First Solar (FSLR ) and Sunpower (SPWR) gained 9% and 17% respectively, as Biden gained more electoral votes.

Those same stocks had been down during the broader market rally the day before, under the assumption that a split Congress would be a headwind for green initiatives and when it was less certain which of the presidential candidates would pick up more votes.

Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre

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