For the large majority of the scientific community that agrees on the existence and causes of global warming, the election of Donald Trump to president of the United States was a dangerous prospect for the climate. But elite business executives in the energy sector may be feeling differently. In both his campaign promises and, more importantly, his cabinet picks, Trump has given reason to believe that he will disregard the overwhelming scientific consensus on man-made global warming in an effort to boost fossil fuel production in the United States. Some have taken this to suggest that energy sector stocks in this area are due for a boost. However, there are important reasons to keep in mind why these stocks may continue to struggle, even with efforts at the highest levels of government to push them.

Rick Perry

Trump announced his plans to appoint Rick Perry as Energy Secretary in recent days. Perry, who served as the governor of Texas, is likely to push for oil and related interests. Analysts speculate that Perry will likely attempt to minimize regulation and the role of the Energy Department, which he had previously suggested should be abolished. Oil industry executives are likely to see Perry's appointment as a sign that they will be freer to tap into United States land for non-renewable resources, boosting production levels in the process. While Trump's surprise victory already inspired a boost in energy sector stocks, Perry's appointment could continue that boost beyond the inauguration as well.

Rex Tillerson

Rex Tillerson, a former CEO of Exxon, is intimately familiar with the oil industry. While detractors point to his close ties with Vladimir Putin and Russia and his total inexperience in matters of official diplomacy, those preferring to most quickly and determinedly milk U.S. energy reserves are cheering the appointment. Given his experience, many analysts have suggested that Tillerson will likely focus on energy, even while his appointment as secretary of state is intended to cover a much broader range of diplomatic discussion with foreign powers. Should Tillerson remain true to his oil roots, it is likely that he will work to boost American energy interests, which in turn could prove to be a boon for stocks in this sector.

There is always a bit of increased volatility and market fluctuation in relation to a presidential election, and this year has been an excellent example of that. Many investment professionals did not predict Trump's victory or the resulting boost to the stock market. Whether this rally, which has affected energy sector stocks more than most other areas, will continue or will taper off sooner rather than later remains to be seen. In any case, expect a great deal of attention on the energy sector in the coming administration.

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