By Adam Claringbull
Investing.com – Oil rose in Asian morning trade following encouraging news on U.S. President Donald Trump’s recovery from COVID-19. However, large falls toward the end of the previous week are yet to be made up.
Brent oil futures rose 2.09% to $40.09 by 12:230 AM ET (4:30 AM GMT) and WTI futures soared 2.32% to $37.91.
Brent crude has pulled back above the $40 mark after falling to its lowest level since June in the previous week, WTI futures also clawed back some of its losses, though it has a way to go to return to parity with the prices from before the previous Friday’s major slump. The previous fall came on the back of news that Trump had contracted COVID-19, and this morning’s rise comes in response to positive news on the U.S. president’s health.
“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,” Avtar Sandu, senior commodities manager at Phillip Futures, told Reuters.
Another factor pushing oil higher is a strike by Norwegian oil workers that the Norwegian Oil and Gas Association says may potentially reduce the country’s output by up to 330,000 barrels of oil equivalent per day (boepd). Also supporting oil prices is intensifying fighting between Armenia and Azerbaijan in the Nagorno-Karabakh, a major oil and gas pipeline corridor, with the Azerbaijan city of Ganja coming under artillery fire over the last two days.
However, increased supply from newly reopened Libyan oil facilities combined with increased exports from Iraq last month are weighing on the markets. Iraq was supposed to have reduced its exports in line with promises made to OPEC that it would cut back on production to compensate for previously overstepping its production quotas.
China’s crude imports are currently slowing, adding a further headwind to oil value, according to a note from J.P. Morgan analysts on Oct. 2. This looks likely to force OPEC+ (OPEC and several other oil-producing nations) to consider further supply cuts at their November meeting.
The global death toll from the COVID-19 pandemic passed 1 million earlier in the previous week, and case numbers have now passed 35 million as of Oct. 5, according to Johns Hopkins University data, further threatening global economic recovery.