Oil rebounds on Trump health update, Norway shutdowns

[October 05, 2020]  By Bozorgmehr Sharafedin

LONDON (Reuters) - Oil prices rose on Monday, lifted by comments from doctors for U.S. President Donald Trump suggesting he could be discharged from hospital as soon as Monday, just a few days after his positive coronavirus test sparked widespread alarm.

A pump jack operates in front of a drilling rig at sunset in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford

Brent <LCOc1> was up $1.47, or 3.7%, to $40.74 a barrel by 1100 GMT. U.S. West Texas Intermediate (WTI) crude <CLc1> was $1.56, or 4.2%, higher at $38.61 a barrel.

"This bout of strength is unlikely to have the legs to withstand the growing pile of unknowns. After all, the oil market is trapped in an unending cycle of uncertainty," said Stephen Brennock of oil broker PVM.

Prices slumped more than 4% on Friday following Trump's diagnosis. However, he made a surprise appearance on Sunday in a motorcade outside the hospital where he is being treated, which helped improve market sentiment.

According to his doctors, he could be discharged from hospital later on Monday.

Oil was also supported by an escalating workers' strike in Norway. Energy major Equinor <EQNR.OL> shut four of its offshore oil and gas fields on Monday as its workers expanded their strike, a company spokesman told Reuters.

Two fields operated by Neptune Energy and Wintershall Dea also face likely shutdowns on Monday because of the strike, the Norwegian Oil and Gas Association (NOG) has said.

"This will not entail any serious tightening of supply on the market as concerns about demand and fears of a renewed oversupply predominate at present," said Commerzbank analyst Carsten Fritsch.

The reduction in Norwegian production was mainly balanced by rising output in Libya, analysts said.

Libyan oil production has increased to 290,000 bpd, a source told Reuters on Monday, almost three times more than its output during a blockade that began in January and ended in September.

Meanwhile recent price rises have prompted some U.S. producers to resume drilling. U.S. 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.

(Reporting by Bozorgmehr Sharafedin in London; Additional reporting by Florence Tan in Singapore; Editing by Jan Harvey and Steve Orlofsky)

[© 2020 Thomson Reuters. All rights reserved.]

Copyright 2020 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.