Why Crude oil prices fell after Trump tested positive to Covid-19

Oil prices fell around 2% on Friday after United States President Donald Trump announced that his wife and himself have tested positive for the coronavirus. In a tweet, Trump said: “Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!”

First Lady also tweeted: “As too many Americans have done this year, @potus & I are quarantining at home after testing positive for COVID-19. We are feeling good & I have postponed all upcoming engagements. Please be sure you are staying safe & we will all get through this together.”

Predictably, the financial markets reacted sharply as oilprices, U.S. stock futures and Asian shares fell. Brent crude slipped on the news and was down 78 cents, or 1.9%, at $40.53 a barrel at 0516 GMT. U.S. oil was 79 cents, or 2%, lower at $37.93. U.S. benchmark crude lost $1.12 to $37.60 per barrel in electronic trading on the New York Mercantile Exchange. It gave up $1.50 to $38.72 on Thursday. Brent crude, the international standard, lost $1.20 to $39.73 per barrel.

Prior to the announcement, Trump has been advocating for a higher crude price and investors in the U.S having been trying to game out prospects of another round of relief payments, with Nancy Pelosi negotiating for it. These factors with the upcoming elections invariably informed the market response.

Trump had tested positive Friday, after one of his top aide, Hope Hicks, was diagnosed with Covid-19 on Wednesday. Hicks was seen boarding both Air Force One and the helicopter designated as Marine One with President Trump, as they went with other administration members to the presidential debate in Ohio on Tuesday.