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 $1.05, or 2.5 per cent, to $41.60 a barrel by 7.33 pm (IST) and US West Texas Intermediate (WTI) crude declined $1.19, or 2.9 per cent, 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 the data in terms of oil consumption,” said Harry Tchilinguirian, head (commodities research), 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 US oil stockpiles rose by 951,000 barrels last week.
“(This was) not exactly what the recovery doctor ordered as 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.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU