We asked traders about the Brexit and its aftermath
Carl Larry @oiloutlooks
1. What do you expect to be the fallout from Great Britain’s vote to leave the European Union?
I expect the breakup to come a lot faster than most are expecting. This “Brexit at Tiffany’s” is too expensive to let it drag on for two years. Eventually we’re going to get back to some sort of balance, but until the two sides are separated, there’s no clear path to redemption.
2. Will others follow?
At this point it’s hard to see other countries following. There needs to be a sign of solidarity during this time, but once we get around to the beginning of 2017 and the Greece debt comes back into question, other countries might see the greener grass of Wimbledon.
3. Will potential contagion create a shake-up in the EU leadership and force reforms in Brussels?
Again, it’s going to get put to the test once we see the first hiccup in economic crisis. Most likely when we get to the annual Greece concern.
4. Will there be an EU in five years? How will it be different? How many of the current 28 members will remain?
The future of the EU lies in the decisions of France and Germany. An interesting move from here is if the EU can agree to open up their issues with Russia and let free trade open again. If not, there might be a little more infighting than expected.
5. Who is this good for? Who is this bad for? What are the political implications?
Well, it’s good for the UK regardless of what is being said. The EU was having trouble since Greece reared its ugly head and the European Central Bank has just dragged its feet on stimulus.
It’s also good for Russia. Despite the economic sanctions that are still in place because of Ukraine, it will give them more leverage to keep business afloat to countries either in the EU or not.
It’s bad for countries that are not happy in dealing with Russia, but it’s also bad for the United States. The thinking behind the Brexit is that isolationism isn’t all that bad. Of course, it’s like everything in politics, there’s always a good idea, but it’s the approach that gets mucked up. All of it results in an lost faith in polls and an outside chance that looks pretty good for a guy named Trump.
Carl Larry is a director and business development consultant for oil and gas at Frost & Sullivan. He provides daily oil market guesstimates with a dose of pop culture.