Oil Report

VEGOILS-Palm falls over 2% on cheaper crude after Trump tests positive for COVID-19

(Adds closing prices)

JAKARTA, Oct 2 (Reuters) - Malaysian palm oil futures fell nearly 3% on Friday as prices of crude oil fell after U.S. President Trump tested positive for the novel coronavirus, with the contract also reporting its second consecutive weekly decline.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed 2.8% lower to 2,715 ringgit ($652.33) a tonne.

It fell as low as 2,691 ringgit during the session. On a weekly basis, the contract fell 3.9%.

“The contract fell due to lower crude oil prices,” said a Kuala Lumpur based trader. Cheaper crude makes palm oil a less attractive feedstock for biofuels.

Oil prices were down 3% on Friday after U.S. President Donald Trump tested positive for COVID-19 and negotiators failed to agree a U.S. stimulus package just as rising global oil output threatens to overwhelm a weak price recovery.

Elsewhere, the soyoil contract on the Chicago Board of Trade fell 2%, as farmer selling offset support from Wednesday’s bullish U.S. quarterly stocks report and strong weekly export sales.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Reuters technical analyst Wang Tao said earlier on Friday that palm oil may revisit its Sept. 30 low of 2,708 ringgit per tonne, as it could have completed a bounce from this level. ($1 = 4.1620 ringgit) (Reporting by Fathin Ungku; Editing by Vinay Dwivedi and Krishna Chandra Elur)