Benchmark oil prices continued to rise strongly on Monday, driven by optimism about the health of US President Donald Trump. In addition, the quotes were supported by the message about the suspension of production at four Norwegian fields due to the workers' strike.
The cost of December futures for Brent oil on the London stock exchange ICE Futures by 17:52 Moscow time was $ 41.56 per barrel, which is $ 2.29 (5.83%) higher than the price at the close of the previous session.
The price of futures on WTI for November at the New York Mercantile Exchange (NYMEX) by this time amounted to $ 39.38 per barrel, which is $ 2.33 (6.29%) higher than the level of the previous session.
The rally in oil “is associated with a general strengthening of the market,” prices are rising after falling last week, while US stocks are higher after the sell-off on Friday, said Robbie Fraser, senior market analyst at Schneider Electric, quoted by MarketWatch.
“The fluctuations are at least partly related to President Trump's health; the uncertainty sparked by the news of his coronavirus disease led to market losses on Friday, while speculation that he could be discharged soon gave support to the market on Monday, the expert notes.
Norway's Equinor has suspended operations at the Gudrun, Gina Krog, Kvitebjorn and Valemon fields in the North Sea due to a strike by 54 workers. Norwegian Oil & Gas said last week that six fields in the North Sea operated by Equinor could be affected by union action, which failed to reach an agreement on wages. The total production from these fields is 330 thousand barrels of oil equivalent per day.
However, according to S&P Global Platts, the outlook for the oil market remains unfavorable, as new quarantine measures threaten the global economic recovery and put pressure on oil demand, while OPEC + is trying to reduce supply through compliance with production quotas.
The agency notes that this week oil prices will be sensitive to news of the spread of the coronavirus, as well as the fate of a new package of measures to support the US economy.
Saxo Bank analysts consider “a collapse like the April one is unlikely.” “However, it is clear that there will be no recovery until either the pandemic is brought under control or a publicly available vaccine is available,” said Ole Hansen, head of commodity strategy at Saxo Bank.