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Crude oil took two big hits last week – stalled US fiscal stimulus talks and President Trump taking ill with COVID-19. The latter appears to be an exogenous shock and strategists at OCBC Bank expect Brent Oil prices to recover to its $40-$43/bbl range.

Key quotes

“ Brent fell 7.2% across last Thursday and Friday and closed below the critical $40 handle on Friday. The US President taking ill with COVID-19 sent Brent spiralling on Friday but we view that as a one-off exogenous shock that impacted sentiment more than fundamentals.”

“Reports suggest Trump might be leaving the hospital as early as today and that is expected to lift risk sentiment from here.”

“We expect Brent to return to the $40-$43/bbl range within this week.”