MOSCOW (MRC) -- Optimism over the recovery of US President Donald Trump from a coronavirus infection boosted crude oil futures at the Oct. 5 Asia open, rebounding from Oct. 2's more than 4% slide, when news of his coronavirus diagnosis threw the oil market into disarray, reported S&P Global.
At 10:39 am Singapore time (0239 GMT), ICE Brent December crude futures were up 71 cents/b (1.81%) from the Oct. 2 settle at USD39.98/b, while the NYMEX November light sweet crude contract was 80 cents/b (2.16%) higher at USD37.85/b.
Both international crude benchmarks had dived 4.05% and 4.31% on the day on Oct. 2, with the ICE Brent settle at USD39.27/b and NYMEX at USD37.05/b.
"Oil prices nudged higher at the [Asia] open, tracking broader markets, after the (US) president's medical staff offered up an optimistic healthcare prognosis," AxiCorp's Chief Global Market Strategist Stephen Innes said in an Oct. 5 note.
The drop in crude futures on Oct. 2 came as the oil markets, which were already reeling from the continuing onslaught of bearish demand and supply factors, were further rattled by news that Trump had tested positive for coronavirus.
ANZ analysts in their Oct. 5 note said: "Futures have been under pressure for several weeks, as rising infection rates of coronavirus in Europe and the US have raised concerns about the continued rebound in economic activity. However, the announcement that President Trump and several other White House officials had contracted the virus reinforced this view, with Brent and WTI crude falling sharply in late trading on Friday."
However, with Trump's medical team giving increasingly optimistic assessments on his health Oct. 4, crude futures rebounded at Asia's open Oct. 5.
The outlook for oil remains bleak as the prospect of renewed lockdown restrictions amid a resurgence of the pandemic threatens to stall global economic recovery and depress oil demand, all while the OPEC+ alliance struggles to reduce supply through compliance with its production quotas.
Amid these unsupportive fundamentals, the trajectory of crude futures this week is expected to be sensitive to news flows on the status of coronavirus cases as well as the US stimulus package.
House speaker Nancy Pelosi said in an MSNBC interview on Oct. 2 that Trump's positive coronavirus diagnosis could encourage the Republicans to extend further support to a stimulus bill, with Trump himself calling for the approval of the bill in an Oct. 4 tweet.
As MRC informed earlier, global oil refiners reeling from months of lackluster demand and an abundance of inventories are cutting fuel production into the autumn because the recovery in demand from the impact of coronavirus has stalled, according to executives, refinery workers, and industry analysts. Refiners cut output by as much as 35% in spring as coronavirus lockdowns destroyed the need for travel. As lockdowns eased, refiners increased output slowly through late August. But in top fuel consumers the United States and elsewhere, refiners have been decreasing rates for the last several weeks in response to increased inventories, a sustained lack of demand, and in response to natural disasters.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.