President Trump’s recent improved health status lifted the morale of oil traders, as buying pressures increased across the energy market, on Monday.
The London trading session witnessed high price upswings with major oil benchmarks gaining 4%.
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Trump’s health update eased political growing geopolitical concerns with Brent crude prices trading above $40/ barrel and U.S. West Texas Intermediate (WTI) above its critical support level of $38.50/barrel.
Prices had earlier dropped 4% last Friday amid growing uncertainty surrounding Trump’s health, adding to the concern that rising coronavirus case numbers could dampen global economic recovery.
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But analysts said Monday’s rebound was driven by an easing of the worst fears about President Trump’s health condition.
Stephen Innes, Chief Global Market Strategist at Axi in an explanatory note to Nairametrics spoke on other key macros affecting the ever-changing commodity market, by saying; “The health of the President will matter to both the polls and risk sentiment in general.
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“Some opinions are starting to emerge around possible bullish scenarios. A stimulus deal becomes more likely in the short term (good for oil). House Speaker Nancy Pelosi will not want to be seen as holding up virus-related spending. She will lower her spending demand. And if Trump’s Covid-19 scare is a quick and mild case, he will likely get a positive bump in the polls.”
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The market is searching for a new narrative. Regardless of the election outcome, the new President will be focused on getting the US back to full employment and fast.