Saturday 3 October 2020 9:33 am

Oil prices slump as Trump contracts coronavirus and global output increases

Oil prices fell more than four per cent on Friday after US President Donald Trump tested positive for Covid-19.

The sell off saw oil post its second weekly decline as rising global crude output threatened to overwhelm the market’s recovery.

Read more: Global oil prices plunge over fresh demand fears

The uncertainty around the health of Trump contributed to a number of factors causing uncertainty, which also included lacklustre unemployment report on Friday and increased supply from major global producers.

In the week, the number of global deaths caused by coronavirus also hit the 1m milestone, with multiple countries reinforcing lockdown restrictions and tightening measures.

As a result, Brent crude fell by 4.1 per cent, or $1.66, to end the day at $39.27 a barrel. It was down seven per cent on the week.

US oil also settled down $1.67, or 4.3 per cent, at $37.05 a barrel, falling by 8 per cent for the week. Both benchmarks were down for a second consecutive week. 

Trump’s announcement that he and First Lady Melania Trump had tested positive for COVID-19 prompted sell-offs in equity markets worldwide.

Meanwhile, the US non-farm payrolls increased by 661,000 jobs last month after advancing 1.49 million in August, the Labor Department announced on Friday.

Read more: Premier Oil seeks to lower price of BP purchases for a second time

Crude supplies from the Organisation of the Petroleum Exporting Countries (OPEC) rose in September by 160,000 barrels per day (bpd) from a month earlier, a Reuters survey showed.

The rise was mainly the result of increased supplies from Libya and Iran – OPEC members that are exempt from a supply pact between OPEC and allies led by Russia, a group known as OPEC+.