President Trump testing COVID-19 positive weighs heavily on oil prices, down 2%

Tokyo: Oil prices extended losses to fall around 2 per cent on Friday after US President Donald Trump tested positive for the coronavirus, while a US stimulus package eluded negotiators amid ongoing worries about demand. Brent crude slipped on the news and was down 78 cents, or 1.9 per cent, at $40.53 a barrel. (US oil was 79 cents, or 2 per cent, lower at $37.93.)

US oil is heading for a drop of more than 5% this week, while Brent is on track to fall more than 4 per cent, in a second consecutive week of decline for both contracts. In a tweet, Trump said he and First Lady Melania Trump tested positive for COVID-19. Trump said earlier he had started a quarantine process after Hope Hicks, a top adviser, had returned a positive test.

Oil was already in negative territory after a bipartisan deal for more economic relief in response to the pandemic continued to elude House Speaker Nancy Pelosi and the White House, adding to fears about worsening demand without more support for the economy.

"The chief culprit appears to be a lack of a new US stimulus package, reflecting the disappointment seen in other asset classes," said Jeffrey Halley, Senior Market Analyst at OANDA. "Oil's upside was always likely to be limited, as fears rise about the global consumption picture, and from rising OPEC+ production."

Crude supplies from the Organization of the Petroleum Exporting Countries (OPEC) in September rose by 160,000 barrels per day (bpd) from a month earlier, a Reuters survey showed. The increase was mainly the result of more supplies from Libya and Iran.

Libya's production has risen faster than analysts expected with the relaxation of a blockade by the Libyan National Army, which is trying to take control of the capital and is mainly based in the eastern part of the country, where many oil facilities are located. Output of crude from Libya has risen to 270,000 bpd as the country ramps up export activity.