(Bloomberg) — Oil retreated after President Donald Trump said he’s halting stimulus talks until after the election and an industry report signaled U.S. crude stockpiles rose for the first time in four weeks.
Trump told his negotiators to stop discussions with Democratic leaders just hours after Federal Reserve Chair Jerome Powell stepped up his call for more spending to avoid damaging the economic recovery. Futures in New York traded 1.8% lower on Wednesday, while other markets were mixed.
The American Petroleum Institute, meanwhile, reported U.S. crude inventories expanded by 951,000 barrels last week, according to people familiar with the figures. Government data is due Wednesday.
Oil has whipsawed the past few days, driven by the prospects of financial stimulus and President Trump’s Covid-19 diagnosis. While prices recently slid back below $40 a barrel amid rising supply and a resurgence in infections, a strike in Norway and a hurricane that’s approaching the Gulf of Mexico are likely to provide some support.
See also: Oil’s Three-Speed Recovery Has Turned the Industry Upside Down
“News that U.S. President Trump intends to postpone talks about economic aid until after the elections is weighing on prices today,” said Carsten Fritsch, analyst at Commerzbank AG.
|West Texas Intermediate for November dropped 1.8% to $39.92 a barrel as of 10:04 a.m. London timeBrent for December settlement slid 1.4% to $42.06|
In a sign of recovering strength in the physical market, Saudi Arabia slightly raised the cost of its flagship Arab Light crude shipped to Asia. The increase in November pricing marks a change in course for the world’s biggest crude exporter after it pared prices in September and October as consumption stagnated.
Meanwhile, U.S. gasoline and distillate inventories fell last week, while crude stockpiles at the storage hub of Cushing rose, according to the API. Energy Information Administration data is forecast to show nationwide crude stockpiles slid by 1.2 million barrels, according to a Bloomberg survey.
|U.S. Gulf operators have shut 29% of oil output with Hurricane Delta strengthening to a Category 4 and is expected to move through the region before hitting Louisiana.China is investing tens of billions of dollars in new mega-refineries even as its fuel demand is expected to peak within five years, raising the risk it will flood the region with cheap exports.|
For more articles like this, please visit us at bloomberg.com
©2020 Bloomberg L.P.