LONDON: Oil prices fell on Wednesday after U.S. 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 U.S. crude inventories.
Brent crude futures were down $1.05, or 2.5%, to $41.60 a barrel by 1403 GMT and U.S. West Texas Intermediate (WTI) crude declined by $1.19, or 2.9%, to $39.48.
“Trump pulling out of relief negotiations generates a lot of uncertainty about the economy … we also didn’t get a constructive set of data in terms of oil consumption,” said Harry Tchilinguirian, head of commodities research at BNP Paribas.
White House Chief of Staff Mark Meadows on Wednesday said he was not optimistic that a comprehensive deal could be reached on further COVID-19 financial aid and that the Trump administration backed a more piecemeal approach.
Crude prices were also hit by American Petroleum Institute data showing U.S. 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 U.S. 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 total U.S. crude output.
In Norway, the Lederne labour union said on Tuesday that it will expand oil strike from Oct. 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%.