Oil down 5% after Trump gets coronavirus and economies wobble

In this news, we discuss the Oil down 5% after Trump gets coronavirus and economies wobble.

LONDON (Reuters) – Oil prices fell 5% on Friday after US President Donald Trump tested positive for COVID-19 and negotiators failed to agree on a US stimulus package, as rising global oil production threatens to overwhelm a weak price recovery.

Brent crude slipped on the Trump news and fell $ 2.05, or 5.01%, to $ 38.88 a barrel at 1:24 p.m. GMT. US oil fell $ 2.01, or 5.19%, to $ 36.71.

US crude and Brent are heading for declines of around 9% and 7% respectively this week for a second straight week of declines.

“Unemployment data in the United States was a bit below expectations, but the drop in the price of oil is part of the larger correction we’ve seen in recent days, driven by bearish macro sentiment and technical trading Harry Tchilinguirian, head of commodities research at BNP Paribas, told me.

“We’ve gone below several short-term moving averages – 30, 50 and 100 days… so the market is looking for the next level of support, which could be around $ 37 a barrel.”

Job growth in the United States slowed more than expected in September as the recovery from the COVID-19 crisis slows down. On Friday, the Labor Ministry said non-farm payrolls increased by 661,000 jobs last month after rising 1.489 million in August.

At the start of the exchanges, Trump tweeted that he and First Lady Melania Trump had tested positive for COVID-19, which sparked liquidations in the US and European stock markets.

Oil was already in negative territory after a bipartisan US stimulus deal continued to elude House Speaker Nancy Pelosi and the White House, adding to fears of worsening demand without more support to the economy.

“There are risks hanging over both demand and supply. Today’s news that US President Trump and the First Lady have contracted COVID added an extra dimension to the whole situation and sent all risky assets, including oil futures , in free fall, ”Commerzbank said in a daily research note.

The Organization of the Petroleum Exporting Countries (OPEC) crude supplies in September increased by 160,000 barrels per day (bpd) from the previous month, according to a Reuters survey.

The increase was mainly the result of increased supplies to Libya and Iran, OPEC members who are exempt from a supply pact between OPEC and its Russian-led allies – a group known as OPEC +.

Libyan production rose to 270,000 bpd, faster than analysts expected following the easing of the blockade by the Libyan national army.

New cases of COVID-19 worldwide have risen to more than 34 million, nearly 2 million more than at the end of last week, according to Reuters figures.

This week marked the grim milestone of one million deaths and several countries are tightening restrictions and considering lockdowns as infections accelerate, raising concerns about the impact on fuel demand.

(GRAPHIC: Global tally of COVID-19 deaths exceeds 1 million -)

Reporting by Aaron Sheldrick in Tokyo and Julia Payne in London; Edited by David Goodman and Mark Potter

Original © Thomson Reuters

Originally posted 2020-10-03 01:26:12.

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