By Barani Krishnan
Investing.com - It was already shaping up to be a bad week for oil and then Donald Trump tested positive for COVID-19.
News of the president’s coronavirus infection added to an already jittery week for investors in oil, who had been watching a rise in caseloads of the pandemic while wondering about their impact on fuel demand. Health concerns aside, a dismal U.S. jobs report for September, along with the threat of rising crude production out of Libya, also weighed on the market.
New York-traded West Texas Intermediate, the key indicator for U.S. crude prices, settled at $37.05 per barrel, down $1.67, or 4.3%, on the day. The low for the day was $36.63, which marked a 3-½ month bottom.
For the week, WTI fell about 8%, posting its second straight weekly decline.
London-traded Brent crude, the global benchmark for oil, settled down $1.66, or 4%, at $39.27. Brent earlier hit $38.80, its lowest since mid-June. For the week, Brent lost 6.3%.
Trump announced via Twitter on Thursday night that he and First Lady Melania Trump had tested positive for COVID-19, hours after he tweeted that Hope Hicks, one of his closest aides at the White House, had been infected as well.
Early Friday, the Labor Department’s monthly non-farm payrolls report showed that the United States gained just 661,000 jobs in September, less than half of the 1.5 million in August, as recovery in employment from the coronavirus slowed.
“A disappointing non-farm payrolls report was icing on the cake for weakness in oil prices today,” said Ed Moya, analyst at New York’s OANDA.
“Trump’s fight against the coronavirus and its potential spread across Washington DC will completely dictate which direction risk takes and that should be closely followed by oil prices,” added Moya. “Oversupply concerns are creeping back as OPEC+ slowly starts to raise production ahead of what could be a winter wave that brings back sporadic lockdowns that will cripple the demand outlook.”
Libya, one of OPEC’s key members, has seen its production rise to 270,000 barrels per day as it ramped up crude exports following a peace deal between Tripoli and forces loyal to renegade general Khalifa Haftar. Analysts said the North African country’s oil output could reach as high as one million barrels daily by in the coming months.