Oil prices fell to about 3% in energy commodities on Friday. This was after the U.S. President Donald Trump said he has tested positive for COVID-19. Agreement on a U.S. stimulus package escaped negotiators amid ongoing concerns about demand.
Brent crude slid on the news, dropping $1.12, or 2.7%, at $39.81 a barrel by 0710 GMT. Moreover, U.S. oil also fell $1.12, or 2.9%, at $37.60.
U.S. and Brent crude are on track for falls of around 5% and 6% respectively this week. This will be for a second consecutive week of declines.
President Trump tweeted that he and First Lady Melania Trump tested positive for COVID-19.
Oil was already in negative territory in commodities. A bipartisan deal in response to the pandemic continued to elude House Speaker Nancy Pelosi and the White House. The deal was to provide more economic relief.
This added to fears about worsening demand without more support for the economy.
Lachlan Shaw, head of commodity research at National Australia Bank in Melbourne, said, it was a weak market already. And this event has come along and added uncertainty. It has given a pause for people to say, they’re going to take some risk off the table, Shaw added.
Oil: The OPEC
Crude supplies from the Organization of the Petroleum Exporting Countries rose in September by 160,000 barrels per day. That was from a month earlier, a survey showed.
The increase was mainly the result of increased supplies from Libya and Iran. The two countries are OPEC members that are exempt from a supply pact between OPEC and allies (OPEC+) led by Russia.
Libya’s production has risen faster than analysts expected. That was after the relaxation of a blockade by the Libyan National Army.
Its crude output has risen to 270,000 bpd as the country ramps up export activity, sources said on Thursday.
New COVID-19 cases worldwide have risen to more than 34 million. That’s nearly 2 million more than at the end of last week, based on tallies.
Commodity news reported this week marked the grim milestone of 1 million deaths and several countries are tightening restrictions. Governments are contemplating lockdowns as infections accelerate, prompting concerns about the impact on fuel demand.
Jeffrey Halley, senior market analyst at OANDA, said, oil’s upside was always likely to be limited. Fears rise about the global consumption picture and rising OPEC+ production.