Last's week's crude selloff called "overdone": File Image/PixaBay
U.S. president Donald Trump's discharge from hospital only several days after he was admitted for Covid-19 symptoms was cited as the inspiration for crude traders Monday to claw back some of the losses of last week, with both benchmarks jumping almost 6 percent.
Brent rose $2.02, or 5.1 percent, to settle at $41.29 per barrel, while. West Texas Intermediate rose $2.17, or 5.9 percent, to settle at $39.22 per barrel.
Of last week's trading activity, which saw losses for crude amid fears of rising infection rates, Phil Flynn, senior market analyst at Price Futures Group Inc., remarked, "A lot of people thought last week's sell-off was overdone; there were a lot of assumptions."
Phil Flynn, senior market analyst, Price Futures Group Inc.
A lot of people thought last week's sell-off was overdone
Crude on Monday was also said to be supported by news that talks would resume tomorrow in Washington on the long-delayed stimulus package to offset the economic impacts of the government-imposed Covid lockdowns.
As for last week's worry that production ramping up in several countries would further impact demand, this was offset somewhat with news of six Norwegian offshore oil and gas fields closing due to a labour conflict: the strike will reportedly cut Norway's total output capacity by just over 330,000 barrels of oil equivalent per day, or about 8 percent of total production.
However, a source told media that Libya's oil production increased to 290,000 barrels per day (bpd), almost three times more than its output during a blockade that lasted the summer.
The alarm on potential bad news was also sounded by John Kilduff, founding partner at Again Capital, who noted that "[D]emand is just not coming back, especially for jet fuel."
But that particular sector may also be headed for much needed relief: on Monday it was reported that airport coronavirus testing could be given the go-ahead within days, which may end or drastically reduce quarantine periods - and boost patronage.