Energy Market Watch: November 2016

October 31, 2016 Allison Schweizer

Energy Market Watch: November 2016

November 2016 is almost certain to be among the more historic months in recent memory. By the time the calendar rolls to Dec. 1, America will have elected a new president and one central U.S. city will be celebrating its first World Series in decades. Of course, November is set to be momentous for energy markets as well, with everything from clean power policy to global oil supply facing decisive dates in the month ahead. If intrigue and suspense are your thing, here are five things to be thankful for (or at least dates to keep an eye on) in the month of November.

November 2: Federal Reserve meeting

OLYMPUS DIGITAL CAMERATwo more meetings: That’s how many opportunities the U.S. Federal Reserve has to raise interest rates in 2016. And after Nov. 2, they’ll be down to only one. Odds are the Fed will need that last meeting, scheduled for Dec. 13 and 14, to squeeze a rate hike in, as expectations for an immediate increase are limited. That’s partially due to fears that the market could get an extra dose of volatility from the next item on our list ahem — a little U.S. presidential election. However, unlike a typical Facebook news feed, the Fed isn’t supposed to concern itself with politics,  they are still allowed to worry about things like volatility and global market uneasiness. So expect a punt to December before some last-minute maneuvering.

November 8: U.S. presidential election

La Habra, United States - July 8, 2016: Close up of Vote election buttons, with red, white, blue and stars and stripes. Hillary Clinton is the democrat candidate and Donald Trump is the republican candidate for President of the United StatesThe presidential election is a high-stakes affair. After what feels like four full years of campaigning, that’s not exactly breaking news. What does get missed from time to time though is that this election is significant in terms of future U.S. energy policy. Sitting quietly behind headline agenda items like healthcare, jobs and national security, energy policy will be considerably different under the two main presidential candidates.

Not only do the candidates have a serious divide on topics like climate change, fracking and renewable energy, but they also will effectively have the ability to decide the fate of the Environmental Protection Agency’s Clean Power Plan (CPP). That’s because the current Supreme Court only has eight members (instead of the usual nine) and is often locked in a 4-4 split. That includes a likely 4-4 split on CPP constitutionality, allowing America’s TBD justice to eventually have the final say. As far as who fills the vacancy, that decision belongs to the Election Day victor.

November 14: Drilling Productivity Report

For some, the Energy Information Administration’s (EIA) Drilling Productivity Report (DPR), is little more than an string of confusing acronyms. For those concerned with oil and gas prices though, the EIA DPR is a must-read. That’s especially true this month, as traders look to gauge the impact of rising natural gas prices in recent months. If additional production shows signs of coming online, prices could slide lower. On the other hand, if rising prices don’t translate to more supply, the current bull run has good reason to keep running. The latest round of the EIA DPR should provide more insight. Gas, and ultimately electric power prices, hang in the balance.

November 23: EIA Natural Gas Storage Report

Silhouette of drilling rig on the north seaThe EIA reports on natural gas storage changes in the U.S. every Thursday, but that doesn’t mean all reports are created equal. Nov. 23’s release is a prime example and not just because of the unusual Wednesday publication. (Happy Thanksgiving!) Its importance rests on its uncertainty, specifically the fact that several weeks out, traders aren’t sure whether the EIA will be offering up a positive or negative number. The release is likely to report either the final gas injection of 2016 or the first winter draw. Being a number that singularly encapsulates the overall supply/demand picture of the natural gas market, the answer to that question will move some serious money and potentially bring some heavy volatility along for the ride.

November 30: 171st Official OPEC Meeting

While families consider all the things they’re thankful for, OPEC, the historically unpredictable and sometimes unfriendly multi-country cartel that has a major influence on energy costs, is unlikely to make the list. Unfortunately, for those who care about gas prices, stock prices or the value of the U.S. dollar, any gratitude would be misplaced.  That’s because oil prices matter to everyone and OPEC still (sort of) reigns in the oil realm. The member countries will be gathering for a regularly scheduled meeting at month’s end where they’ve promised to finalize the details of a much-discussed production cap. If the deal falls through, which remains a distinct possibility, OPEC risks accusations of crying wolf. However, if OPEC can find a bit of common ground, crying wolf could give way to bullish oil prices with the distinct possibility of steeper increases in 2017.

As fast as the preview was to read, November will go even faster. And by month’s end, the world may look much different than it does today. However, there is one thing that will stay the same — the December Energy Market Watch will be waiting. So make sure to check back on the next date’s that will impact energy and financial markets.

The post Energy Market Watch: November 2016 appeared first on Schneider Electric.

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