Oil falls further as Trump tests positive for Covid-19

09:30 02 October in Latest News

Offshore oil platforms are seen on April 20, 2020 in Huntington Beach, California.

Oil prices extended losses to fall around 2% on Friday after U.S. President Donald Trump tested positive for the coronavirus, while a U.S. stimulus package eluded negotiators amid ongoing worries about demand.

Brent crude slipped on the news and was down 78 cents, or 1.9%, at $40.53 a barrel at 0516 GMT. U.S. oil was 79 cents, or 2%, lower at $37.93.

U.S. oil is heading for a drop of more than 5% this week, while Brent is on track to fall more than 4%, in a second consecutive week of decline for both contracts.

In a tweet, Trump said he and First Lady Melania Trump tested positive for Covid-19. Trump said earlier he had started a quarantine process after Hope Hicks, a top adviser, had returned a positive test.

Oil was already in negative territory after a bipartisan deal for more economic relief in response to the pandemic continued to elude House Speaker Nancy Pelosi and the White House, adding to fears about worsening demand without more support for the economy.

“The chief culprit appears to be a lack of a new U.S. stimulus package, reflecting the disappointment seen in other asset classes,” said Jeffrey Halley, Senior Market Analyst at OANDA.

“Oil’s upside was always likely to be limited, as fears rise about the global consumption picture, and from rising OPEC+ production,” he added.

Crude supplies from the Organization of the Petroleum Exporting Countries in September rose by 160,000 barrels per day from a month earlier, a Reuters survey showed.

The increase was mainly the result of more supplies from Libya and Iran, OPEC members that are exempt from an agreement to withhold production between OPEC and allies led by Russia – a group known as OPEC+.

Libya’s production has risen faster than analysts expected with the relaxation of a blockade by the Libyan National Army, which is trying to take control of the capital and is mainly based in the eastern part of the country, where many oil facilities are located.

Output of crude from Libya has risen to 270,000 bpd as the country ramps up export activity, a Libyan oil source told Reuters on Thursday.

New Covid-19 cases worldwide have rise 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 deaths exceeding 1 million and several countries are tightening restrictions and contemplating lockdowns as infections accelerate, prompting concerns about the impact on demand for fuel.


(Source:International Business, World News & Global Stock Market Analysis)