Crude oil prices held to gains after U.S. Trump resumed to the White House from Walter Reed hospital. The initial worries were the POTUS being admitted for COVID-19, coupled with a pending storm waiting to hit the U.S. Gulf of Mexico.
What we know: At the time this report was drafted, U.S. West Texas Intermediate (WTI) gained 0.31% to trade at $39.33 a barrel, and Brent crude prices were up by 0.4%, to trade at $41.46 a barrel.
Prices fell sharply last Friday when President Trump, leader of the free world went into the hospital; then climbed more than 5% on Monday, after he said he would return to the White House, and as hopes grew that a deal could be agreed for a U.S. economic stimulus package, to counter the impact of the coronavirus pandemic.
Why crude oil prices are holding on to its gains: A positive macro on President Trump’s health, has reassured oil traders that all looks well. President Trump under his belt has made the world’s biggest economy, the largest producer of crude oil, and also maintained its lead as the leading producer of natural gas.
Stephen Innes, Chief Global Market Strategist at Axi, in a written note to Nairametrics, spoke on other vital fundamentals disrupting the black fossil market;
“Oil prices rallied in line with broader markets while surging the most since May. The rip higher was primarily driven by optimism that fiscal relief is on the way and will provide the desperately despondent oil market with a much-needed fiscal put through to boost energy demand.
“The US stimulus continues to fend off the oil markets bears, but the fiscal impulse has also lessened the virus’s fear, offsetting the negative news around tightening social mobility measures.”
Elsewhere, a strike in Norway will remove 300,000 barrels of oil from the global supply, thereby keeping crude oil prices relatively stable in the near term.