123RF/EVGENII BASHTA
123RF/EVGENII BASHTA

Singapore/London — 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 lost 74c, or 1.7%, to $41.91 a barrel by 10.09am GMT and US West Texas Intermediate (WTI) crude declined by 89c, or 2.2%, to $39.78.

“Trump pulling out of 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.

Trump, still being treated for Covid-19, ended talks on Tuesday with Democrats on an economic aid package for the US, 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 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 total US crude output.

In Norway, the Lederne labour union said on Tuesday that it will expand an oil strike from October 10 unless a wage deal can be reached. Six offshore oil and gasfields shut down on Monday because of the strike, cutting Norway’s output capacity by 8%.

Reuters

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.