Oil drops 4% after Trump’s positive Covid test
New Covid-19 cases have risen to more than 34 million, nearly 2 million more than at the end of last week. PHOTO: REUTERS
Oil prices were down 4% on Friday after US President Donald Trump tested positive for Covid-19 and negotiators failed to agree a US stimulus package just as rising global oil output threatens to overwhelm a weak price recovery.
Brent crude slipped on the Trump news and was down $1.67, or 4.1%, at $39.26 a barrel by 1038 GMT. US oil was down $1.62, or 4.2%, at $37.10.
US and Brent crude are heading for drops of around 8% and 6% respectively this week for a second consecutive week of declines.
In a tweet, Trump said that he and First Lady Melania Trump tested positive for Covid-19, prompting sell-offs on US and European stock markets.
Oil was already in negative territory after a bipartisan deal on US stimulus continued to elude House Speaker Nancy Pelosi and the White House, adding to fears about worsening demand without more support for the economy.
“Risks lurk on both the demand and supply side. Today’s news that US President Trump and the First Lady have contracted Covid has lent additional poignancy to the whole picture and sent all risky assets, including oil futures, into a tailspin,” Commerzbank said in a daily research note.
Crude supplies from the Organisation of the Petroleum Exporting Countries (OPEC) rose in September by 160,000 barrels per day (bpd) from a month earlier, a Reuters’ survey showed.
The increase was mainly the result of increased supplies from Libya and Iran, OPEC members that are exempt from a supply pact between OPEC and allies led by Russia – a group known as OPEC+.
Libya’s production has risen faster than analysts expected after the relaxation of a blockade by the Libyan National Army. Its crude output has risen to 270,000 bpd as the country ramps up export activity, a Libyan oil source said on Thursday.
New Covid-19 cases worldwide have risen to more than 34 million, nearly 2 million more than at the end of last week, based on Reuters’ tallies.
This week marked the grim milestone of one million deaths and several countries are tightening restrictions and contemplating lockdowns as infections accelerate, prompting concerns about the impact on fuel demand.
“Oil’s upside was always likely to be limited as fears rise about the global consumption picture and rising OPEC+ production,” said Jeffrey Halley, senior market analyst at Oanda.