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By contrast, if Trump does maintain his lead in Pennsylvania and wins in other states like North Carolina, and Georgia, Skolnick said in a research note that the outcome would be positive for Canadian heavy oil because it would likely lead to tighter sanctions on heavy-oil-producing Venezuela and a big U.S. infrastructure spending package.
The S&P/TSX Capped Energy Index ticked up slightly Wednesday morning to $67.76, gaining $1.01 or close to 2 per cent, as markets digested the news.
That increase matches similar increases in crude oil prices, which were up slightly Wednesday. The Western Canadian Select benchmark for heavy crude was up close to 1 per cent, or 26 cents per barrel, to $29.11 per barrel.
The West Texas Intermediate benchmark traded up 2 per cent, or 82 cents per barrel, to reach US$38.48 per barrel.
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.
“Meanwhile the impact on the U.S. economy in the short-term could be quite negative. A clear win for Biden would have helped to speed the implementation of such a relief package,” Abramov said.