Donald Trump, in his presidential campaign, made no secret that he liked oil and gas over renewable sources of energy such as solar and wind.
As president, Trump has done everything to help the oil and gas industry. His first foreign visit was to Saudi Arabia, the world’s biggest oil exporter. Now he has withdrawn from the Paris accord for climate control. I have received a number of questions from investors interested in oil and gas stocks. They are asking why the price of oil fell after Trump announced that the United States was exiting from the Paris accord. To most investors, this is good for oil, and oil prices should have risen. Let’s explore the answer by first looking at a chart.
Please click here for the short-term chart of crude oil futures CLN7. Similar action can be seen in the popular oil ETF USO, The action is pronounced in popular leveraged crude oil ETFs UWT, and DWT. Please note the following from the chart:
• The chart shows the point where Trump announced the withdrawal from the Paris accord.
• Oil futures fell immediately after the announcement.
• During the decline, the VUD indicator was orange, as shown on the chart. The VUD indicator is the most sensitive measure of supply and demand in real time. Orange indicates net selling, and green indicates net buying.
• The amplitude of the VUD indicator to the downside after the announcement was small. This indicates that the net selling was not aggressive…Read more at MarketWatch
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