By Christopher Johnson

LONDON (Reuters) – Oil prices reversed early losses to push higher on Thursday as markets recovered from their initial shock at U.S. President-elect Donald Trump’s surprise victory, although traders said that crude fundamentals remained weak.

Trump’s election initially stunned markets and led Ian Bremmer, president of U.S. risk consultancy Eurasia Group, to warn that “the world is heading into a profound geopolitical recession”.

Most markets shook off post-election losses and bounced back on Thursday.

But the oil market remained cautious ahead of a meeting of the Organization of the Petroleum Exporting Countries on Nov. 30 to decide on production policy, which may lead to output cuts.

“It all depends on the upcoming OPEC meeting,” said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt. “We are still in an oversupplied market and that is not going to change for the foreseeable future unless OPEC cuts.”

Brent crude oil <LCOc1> was up 40 cents at $46.76 a barrel by 0850 GMT. U.S. light crude <Clc1> was up 20 cents at $45.47.

The market was dampened by a 2.4-million barrel rise in U.S. crude inventories to 485 million barrels last week, reported by the Energy Information Administration on Wednesday.

Investors are still assessing the long-term impact of a Donald Trump presidency on world oil supply and demand.

BMI Research said the billionaire’s expected pro oil and gas industry policies might mean U.S. “production of oil and gas could recover at a faster rate in 2017 as developers grow more encouraged”.

Goldman Sachs said a Trump presidency would likely result in higher investment and, in time, increased U.S. oil output as the new president-elect has said he would de-regulate fossil fuel production.

Internationally, the bank said Trump’s threat of renewed U.S. sanctions against OPEC-member Iran would “further incentivize Iran to maximize production in the short term rather than comply to an OPEC freeze”.

This reinforced traders’ doubts over the ability of OPEC and other producers such as Russia to trim output to prop up prices.

“The outcome of the U.S. election adds to the challenges for the oil exporters because it will likely lead to weaker economic growth in an already fragile global economy. And that means additional pressure on oil demand,” said Daniel Yergin, vice-chairman of the IHS Markit think tank.

(Additional reporting by Henning Gloystein in Singapore; Editing by Keith Weir)

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