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Tran said that one other area where Biden could please his environmental base is with more stringent efficiency standards of gasoline- and diesel-burning vehicles.
“This is what I think is the silent killer of oil demand. It’s not as sexy as electric vehicles,” Tran said. “If you want to take carbon emissions down, the policy on the efficiency side is something that people haven’t talked enough about.”
While the battle for the White House drags out, a TD Economics report Wednesday said there’s likely to be heightened volatility in financial markets and a lower likelihood that an American fiscal stimulus is passed and enacted by early 2021, given the expected standoff between Republicans and Democrats in Congress.
The report also suggested that a Republican controlled Senate could potentially block Biden appointees to regulatory agencies that enforce energy and climate policies. The report said the administration’s “ability to block Biden nominees may constrain who he appoints to key regulatory agencies, likely exerting a moderating influence on any potential changes,” TD analysts Beata Caranci, James Marple and James Orlando wrote.
However, the likelihood of legislation that eliminates tax incentives for oil producers passing through the Senate without a clear Democratic majority is small.
“Perhaps the biggest conclusion to be drawn at this stage is that there is only a small likelihood that existing oil and gas tax incentives will be removed in the U.S. – even if Biden emerges as the winner — given the narrow margin of victory and a probable Republican majority in the U.S. Senate,” Rystad Energy’s head of shale research Artem Abramov said in a Wednesday research note.
The S&P/TSX Capped Energy Index ticked up close to 2 per cent Wednesday morning, but closed effectively flat, underperforming oil prices.
West Texas Intermediate ended the session up 4 per cent at US$39.15 a barrel, Brent crude settled up 3.8 per cent to US$41.23 a barrel, while the Western Canadian Select benchmark for heavy crude Canadian ended 1 per cent higher to $29.11 per barrel.