U.S. oil company stocks rose Wednesday, with former President Donald Trump, viewed as a big backer of increased oil supply, set to return to the White House.
ExxonMobil (XOM) shares climbed 2%, while those of rival Chevron (CVX) gained around 3%. Shares of smaller oil companies including Diamondback Energy (FANG), ConocoPhillips (COP) and Halliburton (HAL) also rose.
Trump is viewed as a supporter of increased oil supply from American producers and higher tariffs, both likely benefiting domestic players.
Trump has talked of plans to increase oil production, saying he would use emergency powers to push through new oil drilling, refinery construction, new power plants and other projects to increase output. Trump has repeatedly promised to “drill, baby, drill” for more domestic energy.
Crude futures fell before paring back losses early Wednesday as the prospects of increased supply weigh on an existing glut in oil and a weak outlook for demand, especially given China's slowing economy.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) like Russia extended their output cuts by one month this week, but their attempts to trim supply have failed to stem a slide in oil prices this year. Major oil producers like the U.S. and Canada are outside the grouping.
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