On Monday, oil prices jumped on account of the encouraging health report of the US President Donald Trump.
By 02.32 GMT, Brent crude oil futures rose by 1.8% or 69 cents to USD39.96/barrel while US WTI climbed by 2.1% or 76 cents to USD37.81/barrel.
Doctors for President Trump suggested that he could be discharged from the hospital as soon as Monday, after a few days prior he announced his positive result for coronavirus on Friday which raised the widespread alarm.
Previously on Friday, oil prices nosedived by more than 4% amid the concerns regarding the president’s health, weighing the global worry of the coronavirus case numbers that could dampen global economic recovery.
Avtar Sandu of Phillip Features commented that investors were also concerned about the stalled US fiscal stimulus plan, which could support oil demand recovery.
Other than that, the Norway energy workers’ strike on Monday also provided support to oil prices as it could slash the country’s production capacity by roughly 330,000 boepd, or 8% of its total output. This possibility offset the signals of increasing oil supply in the market.
Nevertheless, the risk of a supply glut in the market remains with Libya has been spurring its oil output to almost three-fold, hitting 270,000 bpd last week following the eased a blockade on the country’s oil infrastructure.
Data from Baker Hughes showed that the US energy companies added oil and natural gas rigs for the third consecutive week for the first time since October 2018 on the back of the recent price increases. This could add to the severity in the market, moreover when at the moment, China is slowing its crude imports.
JP Morgan analysts noted that Brent could be pushed down to USD41/barrel in the fourth quarter.
This would open a contemplation on whether the Organization of the Petroleum Exporting Countries and its allies (OPEC+) would make another decision on supply cut in November.
