Oil rebounds on Trump health update, Norway shutdowns

LONDON:

Oil prices rose on Monday, lifted by comments from doctors for US President Donald Trump suggesting he could be discharged from hospital as soon as Monday, just a few days after his positive coronavirus test sparked widespread alarm.

Brent LCOc1 was up $1.47, or 3.7%, to $40.74 a barrel by 1100 GMT. US West Texas Intermediate (WTI) crude CLc1 was $1.56, or 4.2%, higher at $38.61 a barrel.

“This bout of strength is unlikely to have the legs to withstand the growing pile of unknowns. After all, the oil market is trapped in an unending cycle of uncertainty,” said Stephen Brennock of oil broker PVM.

Prices slumped more than 4% on Friday following Trump’s diagnosis. However, he made a surprise appearance on Sunday in a motorcade outside the hospital where he is being treated, which helped improve market sentiment. According to his doctors, he could be discharged from hospital later on Monday.

Oil was also supported by an escalating workers’ strike in Norway. Energy major Equinor shut four of its offshore oil and gas fields on Monday as its workers expanded their strike, a company spokesman told Reuters.

Two fields operated by Neptune Energy and Wintershall Dea also face likely shutdowns because of the strike, the Norwegian Oil and Gas Association (NOG) said.

“This will not entail any serious tightening of supply on the market as concerns about demand and fears of renewed oversupply predominate at present,” said Commerzbank analyst Carsten Fritsch.

The reduction in Norwegian production was mainly balanced by rising output in Libya, analysts said.

Libyan oil production has increased to 290,000 bpd, a source said, almost three times more than its output during a blockade that began in January and ended in September.

Meanwhile, recent price rises have prompted some US producers to resume drilling. US energy firms this week added oil and natural gas rigs for a third week in a row for the first time since October 2018, data from Baker Hughes showed on Friday.