NEW YORK (Reuters) – Oil prices climbed more than 5% on Monday after U.S. President Donald Trump said he will leave the hospital where he is being treated for COVID-19, while six Norwegian offshore oil and gas fields were shut as more workers joined a strike.
Brent LCOc1 rose $2.02, or 5.1%, to settle at $41.29 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 rose $2.17, or 5.9%, to settle at $39.22 a barrel.
“A lot of people thought last week’s sell-off was overdone,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “There were a lot of assumptions.”
On Friday, prices slumped more than 4% following the news that Trump had tested positive for the coronavirus. On Monday, Trump said he will leave the military hospital where he was being treated later in the day, adding that he felt “really good.”
A wave of infections has hit his White House four weeks before the U.S. election.
Hopes for a U.S. stimulus package to counter the economic impacts of the pandemic also supported prices. U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke by phone for about an hour on Monday and were preparing to talk again on Tuesday.
Oil was also supported by the escalating workers’ strike in Norway over pay. Six Norwegian offshore oil and gas fields were shut.
The strike will cut Norway’s total output capacity by just over 330,000 barrels of oil equivalent per day, or about 8% of total production, according to the Norwegian Oil and Gas Association (NOG).
“This will not entail any serious tightening of supply on the market as concerns about demand and fears of a renewed oversupply predominate at present,” said Commerzbank analyst Carsten Fritsch.
The reduction in Norwegian production was mainly balanced by rising output in Libya, analysts said.
Libyan oil production has increased to 290,000 barrels per day, a source told Reuters on Monday, almost three times more than its output during a blockade that began in January and ended in September.
Energy companies on Monday began evacuating offshore oil platforms as the 25th named storm of the year formed in the Caribbean and was forecast to move into the Gulf of Mexico and threaten the Gulf Coast this week.
Reporting by Stephanie Kelly in New York; additional reporting by Bozorgmehr Sharafedin in London and Florence Tan in Singapore; Editing by David Gregorio, Steve Orlofsky, Mark Potter and Sonya Hepinstall