FX.co ★ Trump being infected by COVID-19 has accelerated oil price decline

Today, Donald Trump tweeted that he and his first lady Melania Trump, tested positive for COVID-19. We cannot say that this event was entirely surprising for the Trump couple, because earlier, the US president said that he and his wife would go to quarantine. The reason for self-isolation was the confirmed diagnosis of coronavirus by senior White House adviser Hope Hicks.

Big reaction to a small tweet

After sympathetic sighs and messages to support the Trump family, the whole world shifted its focus towards the global raw materials market. After all, we have all heard about the sensitivity of oil prices to any change in our unstable world. As it turned out, the feelings of the public were for good reason. This morning, global oil prices declined by 2%. The trading data confirms that the price decline was a rapid reaction to the message of the head of the United States. We would like to remind you that before the publication, oil prices were 1% cheaper.

Disappointing forecasts

As of the morning of October 2, the price of December futures for the North Sea Brent oil mixture fell to $ 40.12 per barrel (by 1.98%), while the price of November futures for WTI fell to $ 37.94 per barrel (by 2.01%).

At the same time, we should not forget that conditions in the oil market remain disappointing. The statement of ANZ Bank analysts, who warn of unfavorable expectations for demand due to the growth of supply, does not inspire optimism either.

The prices were sorted out, but what about the production?

The markets began to seek comfort in oil production, after the frightening news regarding its price. Investors were happy to receive information from the world media about the increase in oil production in Libya to 270 thousand barrels per day. It can be recalled that at the beginning of the week, Bloomberg reported that oil production in Libya fluctuates around 150 thousand barrels per day.

However, it is difficult to forecast any long-term conclusions today. The situation around COVID-19 continues to support the possibility of a second wave of outbreak. Obviously, this situation can restrain the recovery of the world economy and, as a result, the demand for oil.