Oil rises more than 1% after upbeat signals from Trump doctors

[SINGAPORE] Oil prices rose more than 1 per cent on Monday, lifted by comments from doctors for US President Donald Trump suggesting he could be discharged from hospital as soon as Monday, just a few days after his positive test for Covid-19 sparked widespread alarm.

Mr Trump's health update eased political uncertainty in global markets, pushing Brent up to US$39.79 a barrel by 0140 GMT, gaining 52 cents or 1.3 per cent. US West Texas Intermediate (WTI) crude was at US$37.64 a barrel, up 59 cents, or 1.6 per cent.

Prices had slumped more than 4 per cent on Friday amid uncertainty surrounding Mr 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 Mr Trump's health condition, albeit clouded by some mixed signals.

"I think it's the improving health of the US 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," Mr Sandu said, adding that investors were worried about the stalled US fiscal stimulus plan which could aid oil demand recovery.

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Oil could yet receive a jolt from an expanding strike by Norwegian workers 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 per cent of the country's total output, according to the Norwegian Oil and Gas Association.

Signs of Mr Trump's health improving 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.

Meanwhile recent price increases have prompted some US producers to resume drilling. US energy firms this week added oil and natural gas rigs for a third week in a row for the first time since October 2018, data from Baker Hughes showed on Friday.

But the rise in supplies comes at a time when China's crude imports are slowing, which could depress Brent to US$41 a barrel in fourth quarter, JPMorgan analysts said in an Oct 2 note, leaving Opec and its allies, including Russia, to face another decision on supply cuts in November.

REUTERS