Oil rallies from 3-week low buoyed by Trump’s improving health
INTERNATIONAL - Oil rose from a three-week low after a member of Donald Trump’s medical team said the U.S. president could leave hospital as soon as Monday, despite contradictory accounts about his health.
Futures advanced as much as 3.7% in New York, mirroring a broader relief rally in stock markets, after the biggest weekly drop since June. Trump’s condition remained clouded by confusion, with the president making a surprise outing from the medical center in a show of strength.
Meanwhile, a strike in Norway has cut about 330,000 barrels a day of production, though the country’s largest field is continuing to pump. Eqiunor ASA is shutting down four North Sea fields after employers and employees failed to find common ground on a wage deal.
The recent bout of price weakness has pushed Brent oil back to near $40, with a resurgence of the coronavirus in some major economies raising concerns about a sustained recovery in consumption. As a result, speculators have shunned the global benchmark, with outright long positions falling to a six-month low last week. All the while, Libyan output rose to about 300,000 barrels a day as the country’s fledgling output recovery continues.
“Oil is bouncing back as risk sentiment is recovering,” said Jens Pedersen, senior analyst at Danske Bank. “Weak fundamentals, in particular in light of rising OPEC+ output amid weak demand, will limit the extent to which oil prices rally.”
Though many of Europe’s biggest economies are still grappling with the virus, the continent’s retail fuel demand is almost back where it was last year, Total CEO Patrick Pouyanne said at a conference. While that may appear positive news for consumption, “refining margins are absolutely terrible,” he said.
The recent weakness in headline prices has also been added to by technical trading companies, known as commodity trading advisers or CTAs. Twelve of fourteen strategies such funds would usually employ are currently short, according to Keith Wildie, a broker at Britannia Global Markets.
- Saudi Arabia pumped 8.974 million barrels a day in September compared with 8.988 million barrels a day in August, according to an industry official familiar with the kingdom’s production levels.
- A second system gathering strength south of Jamaica may threaten Gulf energy production and Louisiana as a Category 2 hurricane later this week.
- Armenians fired rockets at the Absheron district near the Azeri capital of Baku, Hikmet Hajiyev, foreign policy aide to President Ilham Aliyev, said on Twitter.