Oil price down as Trump tests positive for COVID-19

Oil price down as Trump tests positive for COVID-19

The FINANCIAL -- Oil fell by 5% on Friday after Trump tested positive for coronavirus. It was already in negative territory after a bipartisan deal on U.S. stimulus continued to elude House Speaker Nancy Pelosi and the White House, adding to fears about worsening demand without more support for the economy.  However, oil prices are expected to rise just slightly in the final quarter of the year, held back from further gains by a deep chill in global travel and a still-healing economy.

Oil tumbled to the lowest in more than three weeks after President Donald Trump said he tested positive for Covid-19, heightening concerns over an economic recovery. Futures in New York plunged on Friday, before paring losses slightly amid renewed efforts in Washington to reach a deal on fiscal stimulus. So far, Trump’s symptoms were said to be mild. With Covid-19 cases flaring up from New York to London, Trump’s positive coronavirus diagnosis adds an additional degree of uncertainty during a resurgence of the global pandemic, Bloomberg reported.

Brent crude slipped on the Trump news and was down $2.05, or 5.01%, at $38.88 a barrel by 1324 GMT. U.S. oil was down $2.01, or 5.19%, at $36.71. U.S. and Brent crude is heading for drops of around 9% and 7% respectively this week for a second consecutive week of declines. Oil was already in negative territory after a bipartisan deal on U.S. stimulus continued to elude House Speaker Nancy Pelosi and the White House, adding to fears about worsening demand without more support for the economy. Crude supplies from the Organization of the Petroleum Exporting Countries (OPEC) rose in September by 160,000 barrels per day (bpd) from a month earlier, a Reuters survey showed. The rise was mainly the result of increased supplies from Libya and Iran, OPEC members that are exempt from a supply pact between OPEC and allies led by Russia - a group known as OPEC+, Reuters wrote.

Oil prices are expected to rise just slightly in the final quarter of the year, held back from further gains by a deep chill in global travel and a still-healing economy. Analysts forecast the prices of Brent and West Texas Intermediate should rise to the low to mid-$40s per barrel, but they also see risks tilted toward another drop in oil prices. Oil prices have clawed back from a crushing decline earlier this year, as the global economy shut down. Oil futures prices were even temporarily negative, as the market reacted to huge oversupply and a big drop in global demand. WTI futures fell below $40 this week and settled at $38.71 Thursday, falling 3.9% amid worries about the coronavirus and reports of a rise in OPEC output, according to CNBC.

In March of 2020, Opec's 14 members led by Saudi Arabia met with its allies Russia and other non-Opec members. They met to discuss how to respond to falling demand caused by the growing spread of the coronavirus. But the two sides failed to agree on measures to cut production by as much as 1.5 million barrels a day, BBC wrote.

At that time oil prices plunged by around 30% as Russia refused to join the Organization of the Petroleum Exporting Countries [OPEC] in a large production cut. Because of that Saudi Arabia launched an aggressive price war. Brent crude futures fell by as much as $14.25, or 31.5%, to $31.02 a barrel. 

BP to cut down on oil spending and focus on clean energy as a part of a major strategic overhaul revealed in August of 2020, together with a major second-quarter loss and a dividend cut. BP introduced a new strategy that will reshape its business as it pivots from being an international oil company focused on producing resources to an integrated energy company focused on delivering solutions for customers. By 2030, bp aims for emissions from its operations and those associated with the carbon in its upstream oil and gas production (addressed by Aim 1 and Aim 2 of bp’s net-zero ambition) to be lower by 30-35% and 35-40% respectively. Read more

How COVID-19 and Oil-price Drop Hit EU Eastern Partner Countries

Author: The FINANCIAL

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