SINGAPORE- Oil prices fell on Wednesday after US President Donald Trump dashed hopes for a fourth stimulus package to boost the coronavirus-hit economy and on a larger-than-expected increase in US crude inventories.
US West Texas Intermediate (WTI) crude oil futures fell 81 cents, or 2 percent, to $39.86 a barrel while Brent crude futures fell by 70 cents, or 1.6 percent, to $41.95 a barrel.
“Crude prices got hammered with one-two punch after President Trump sent all risky assets into freefall after ending negotiations on fiscal stimulus and after US crude stockpiles posted their first build in four weeks,” said Edward Moya, senior market analyst at OANDA.
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, with the US presidential election only weeks away.
“President Trump’s decision to end fiscal stimulus talks surprised markets. While many didn’t expect to see a deal reached before the election, the abrupt end sent all risky assets sharply lower,” Moya added.
Price were also pressured by data from the American Petroleum Institute 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.