Monday 5 October 2020 5:42 pm

Oil prices jump on optimism over Trump health updates

Oil prices surged six per cent today after doctors said US President Donald Trump could soon be discharged from hospital following his Covid-19 diagnosis.

Brent crude rose 5.6 per cent to $41.48 per barrel this afternoon, while US West Texas Intermediate was up 6.4 per cent to $39.42 per barrel. 

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Oil prices had dropped more than four per cent on Friday as Trump was flown by military hospital by helicopter after testing positive for coronavirus.

While the president’s condition remained unclear at the beginning of the day, doctors have said he could return to the White House as early as this evening.

Prices were also boosted by increased hopes of a US stimulus package after White House chief of staff Mark Meadows said there was still potential for lawmakers to reach an agreement on further economic support to counteract the impact of the pandemic.

“Apart from news of Donald Trump potentially being discharged from hospital as early as today, there is growing optimism that a US fiscal stimulus package will soon be agreed by the two sides amid growing signs that the pace of the economic recovery post lockdown has slowed down quicker than expected,” said Fawad Razaqzada, market analyst at Think Markets.

“Investors are hoping that with more stimulus, the US economic output should rise and thus provide tailwind support for oil prices as demand for crude oil continues to recover post lockdown.”

Read more: Oil prices slump as Trump contracts coronavirus and global output increases

Oil was also buoyed by the closure of six Norwegian offshore oil and gas fields as more workers joined a strike in an escalating row over pay.

The strike will cut Norway’s total output capacity by just over 330,000 barrels of oil equivalent per day, or about eight per cent of total production, according to the Norwegian Oil and Gas Association.