SULAIMANI (ESTA) — Oil prices rose more than 2% on Monday, lifted by comments from doctors for U.S. President Donald Trump suggesting he could be discharged from hospital as soon as Monday.
Trump’s health update eased political uncertainty in global markets, pushing Brent LCOc1 up to $39.96 a barrel by 0708 GMT, gaining 69 cents or 2%. U.S. West Texas Intermediate (WTI) crude CLc1 was at $37.79 a barrel, up 74 cents.
Prices had slumped more than 4% on Friday amid uncertainty surrounding Trump’s health, adding to concern that rising coronavirus case numbers that could dampen global economic recovery.
But analysts said Monday’s rebound was driven by an easing of the worst fears about Trump’s health condition, albeit clouded by some mixed signals.
“I think it’s the improving health of the U.S. President … over the weekend there were a lot of conflicting reports on his health, but generally he’s improving,” said Avtar Sandu, senior commodities manager at Phillip Futures.
“He could be back to work soon,” Sandu said, adding that investors were worried about the stalled U.S. fiscal stimulus plan which could aid oil demand recovery.
Prices were also supported by an expanding workers’ strike in Norway on Monday that could reduce the country’s production capacity by as much as 330,000 barrels of oil equivalent per day (boepd) or 8% of its total output, according to the Norwegian Oil and Gas Association.
These offset indications of rising oil supply in the market.
Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), has seen a near three-fold rise in its output which hit 270,000 barrels per day last week after eastern forces eased a blockade on the country’s oil infrastructure.
“That very fragile supply deficit that we have looks like it’s going to be gone if Libya does produce an extra half a million (bpd) more alone,” OCBC’s economist Howie Lee said, adding it could delay drawdowns in excess inventory supplies.