(Reuters) – Goldman Sachs said the outcome of U.S. elections would not impact its bullish oil and natural gas outlook and that an overwhelming Democratic victory could be a positive catalyst for these sectors.

Goldman reiterated its bullish 2021 view for both natural gas and oil, saying drivers for higher prices supersede the potential outcomes of the U.S. election.

“The recent gyration in oil prices, rallying on days of higher expected stimulus and weakening dollar, suggest that a Biden election and blue sweep could in fact prove a bullish catalyst for oil,” the bank said, adding that natural gas prices could rally too.

Opinion polls show presidential candidate Joe Biden with a substantial lead over President Donald Trump nationally, although with a narrower advantage in some of the states that may decide the Nov. 3 election.

Headwinds to U.S. oil and gas production would rise further under a Biden administration, with the potential for regulations raising the cost of shale production and reducing recoverable shale resources, Goldman added.

Biden’s climate priorities also point to a faster deployment of renewable sources of energy than currently expected, Goldman said, adding such an agenda would require new infrastructure, which alongside a likely large initial fiscal stimulus, would lead to higher oil demand in coming years.

(Reporting by Nakul Iyer and Eileen Soreng in Bengaluru. Editing by Gerry Doyle)

Copyright 2020 Thomson Reuters.

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By Philip Lawlor, head of Global Investment Research

Given all the market anxiety surrounding the upcoming US presidential election, we thought a fact-based, dispassionate look at how markets have behaved in previous election cycles may be useful.

Our findings, which dissected three-month moves in both US stocks and nominal and real Treasury yields following the past five US elections, are shown in the table below. The overwhelming (and hardly surprising) conclusion: the economic backdrop has been a far bigger driver of post-election market performance than the winner or winning party.

Three-month market moves following the past five US presidential elections

Source: FTSE Russell/Refinitiv. Data as of September 30, 2020. Past performance is no guarantee to future results. Please see the end for important disclosures.

In two clear examples, the pullback in equities and Treasury yields following the 2000 and 2008 elections, when different parties won in clean sweeps, was more likely an outgrowth of the economic crises prevailing during both periods (the bursting of the tech bubble and the global financial crisis, respectively) than a reaction to the election outcome.

Different parties also won the White House in 2004 and 2012, but the improving economy and the easing of the Eurozone debt crisis (reinforced by ECB President Mario Draghi’s pledge to do “whatever it takes”) would seem the more likely catalysts of the subsequent gains in stocks and bond yields. The rally following the Trump and Republican clean sweep in 2016 owed much to the reflation trade and ongoing growth optimism.

As they say, “it’s the economy, stupid”

As this history lesson suggests, US market performance in the months following this year’s election is more likely to hinge on the degree of success in containing the coronavirus and the US economic outlook than on whether the Republican or Democrat wins.

A disputed outcome to the upcoming U.S. presidential election in November is now the primary concern for investors, topping a second wave of coronavirus.

This is according to a survey carried out by deVere Group, who asked over 700 clients ‘What is your biggest investment worry for the rest of 2020?’

The number one investment worry was a contested U.S. election (72%); the effect of a second wave of Covid-19 (18%) and the U.S.-China trade war (5%). The remaining 5% was comprised of geopolitical issues such as Brexit.

The 735 people who took part in the poll are resident in the UK, North America, Europe, Asia, Africa, Latin America, and Australasia.

We can clearly see that investors across the globe are starting to become seriously concerned about the U.S. presidential election.

However, it’s not about whether Trump or Biden comes out on top, it’s about the impending possibility of a disputed outcome.

As it stands, President Trump is already questioning the election’s legitimacy, increasing the chances of a contested result and subsequent constitutional crisis in the world’s largest economy.

Therefore, investors have become increasingly fearful that this will lead to massive bouts of volatility in the markets in the U.S. and around the world.

It’s highly likely that any volatility stemming from the election will have an immense impact for perhaps two to three weeks.

As always, investors should remain in the market at this time. Indeed, to my mind, there are two key reasons why investors should build up their portfolios during times of volatility.

First are the benefits over the long-term. Of course, there are many unknowns, but the performance of stock markets does tend to go up over the longer-term.

As such, for this very reason, investing in equities over the long-term is typically universally recognized as