Oil prices were hit by a double whammy on Friday, with news that President Donald Trump said he has contracted coronavirus adding to the industry’s concerns about rising worldwide cases of the disease which may dent demand for the commodity.
The news that Trump and First Lady Melania Trump tested positive for Covid 19 “creates a new round of market uncertainty and reinforcing fears of a second wave of the virus, which will harm the economy and projected energy demand,” said Phil Flynn, senior market analyst at The Price Futures Group, in a Friday note. “Broader implications of the diagnose for energy, not only for the short term but for the long-term, cannot be understated. “
West Texas Intermediate crude for November delivery tumbled $1.59, or 4.1%, to $37.13 a barrel on the New York Mercantile Exchange, after dropping 3.7% on Thursday.
December Brent crude futures slid 4.2%, or $1.72, to $39.21 a barrel on ICE Futures Europe. The contract fell 3.2% on Thursday.
Based on the front-month contracts, WTI and Brent futures were poised to suffer losses of nearly 8% for the week.
“Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately,” Trump said on Twitter. Dr. Sean Conley, the physician to the president, said the president will continue to carry out his duties and that both he and Melania were “well at this time.”
“The news throws uncertainty into the immediate future of both the incumbent’s election campaign and potentially the U.S. leadership,” said analysts at the JBC Energy Research Centre, in a note to clients.
Oil prices had logged their lowest settlement since mid-September on Thursday, driven by fears that COVID-19 cases will drive demand lower, even as supply tightens up. The Energy Information Administration on Wednesday reported a surprise fall of 2 million barrels in U.S. crude supply, the third straight weekly decline.
Investors in oil markets have been keeping close watch on the disease’s expansion, which has worsened in parts of Europe, because it has a direct effect on the commodity if economies begin to slow down.
“The main reason for the latest surge in demand is that people are using their own vehicles rather than public transport for fear of catching coronavirus, which puts a number of question marks over the recovery,” said Eugen Weinberg, head of commodity research at Commerzbank, in a note to clients.
Among other petroleum products, November gasoline lost 3.9% to $1.1073 a gallon, with prices trading nearly 7% lower for the week, and November heating oil declined by 4.1% to $1.0784 a gallon, poised for a weekly loss of around 5%.
November natural gas traded at $2.489 per million British thermal units, down 1.5% in Friday dealings. For the week, prices trade more than 11% lower.