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Oil prices rally over Trump’s improving health, Norway shuts down; Bonny Light sheds $0.30

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Oil set for third weekly gain on China’s increasing demand, Brent gains 1.3%

Oil prices advanced on Monday, boosted by doctors’ view on United States President Donald Trump’s health, with intimations he could be discharged from hospital on Monday.

Brent crude futures were up 3.67% to $40.71 per barrel at 14.12 West Africa Time (WAT). U.S. crude futures also edged up by 4.35% to $38.66 per barrel.

Bonny Light, Nigeria’s premium oil grade, declined by 30 cents or 0.77% to $38.64 on Friday.

Qua Iboe, another major national crude grade, jumped 28 cents or 0.72% to $39.02 at 06:24 WAT.

Stephen Brennock of oil broker PVM said “this bout of strength is unlikely to have the legs to withstand the growing pile of unknowns. After all, the oil market is trapped in an unending cycle of uncertainty.”

Prices fell by over 4% at the Friday session after Trump health reports. He made an unexpected public appearance on Sunday in a motorcade outside the hospital where he is in remission, strengthening market sentiment. Doctors said he could be out later on Monday.

Read also: Oil prices edge lower as pandemic sparks demand fall; Bonny Light down $1.64

Crude prices were helped by a festering industrial action in Norway. Equinor closed down four of its offshore oil and gas fields on Monday as employees lengthened their strike, a company spokesperson told Reuters.

The action may force two fields run by Wintershall Dea and Neptune Energy to shut down on Monday, said the Norwegian Oil and Gas Association said.

“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 decline in Norway’s output was mostly tempered by increasing Libyan supply.

Crude production in Libya is no up to around 290,000 barrels, according to a Reuters source, almost 300 per cent bigger than its production during a blockade that started in January and terminated in September.

Recent increases in prices have impelled a couple of U.S. producers to resume drilling. Oil and gas companies in the U.S. this week added oil and natural gas rigs for a third week, the first time since October 2018, data from Baker Hughes showed on Friday.

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