Oil prices fell on Wednesday after US President Donald Trump dashed hopes for a fourth stimulus package to boost the coronavirus-hit economy, with prices also pressured by a larger-than-expected rise in US crude inventories.
Brent crude futures were down $1, or 2.3%, to $41.65 a barrel by 1145 GMT and US West Texas Intermediate (WTI) crude declined by $1.14, or 2.8%, to $39.53.
“Trump pulling out of relief negotiations generates a lot of uncertainty about the economy ... we also did not get a constructive set of data in terms of oil consumption,” said Harry Tchilinguirian, Head of Commodities Research at BNP Paribas.
President Trump, still being treated for Covid-19, ended talks on Tuesday with Democrats on an economic aid package for the United States, the world’s biggest oil consumer, only weeks away from the US presidential election.
Crude prices were also hit by American Petroleum Institute data showing US oil stockpiles rose by 951,000 barrels last week.
“(This was) not exactly what the recovery doctor ordered as the oil market was already tanking from a two-week high after President Trump quashed hope for a pre-election stimulus deal,” said Stephen Innes, Chief Market Strategist at online brokerage AxiCorp.
Losses were capped by restrictions on the supply side.
Energy companies secured offshore platforms and evacuated workers on Tuesday, some for the sixth time this year, as Hurricane Delta threatened US oil output in the Gulf of Mexico.
The storm has shut 29.2% of offshore oil production in the Gulf, which accounts for 17% of the total US crude output.
In Norway, the Lederne labour union said on Tuesday that it will expand oil strike from October 10 unless a wage deal can be reached. Six offshore oil and gas fields shut down on Monday because of the strike, cutting Norway’s output capacity by 8%.
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