Oil prices experienced a drop on Wednesday after US President Donald Trump abruptly called off talks with Democrats on an economic aid package for the Covid-19 pandemic-hit nation.
Brent crude futures dropped by 1.7% to $41.91 per barrel, while US West Texas Intermediate (WTI) crude oil futures fell 2.1% to $39.80 a barrel, Reuters reported.
President Trump’s announcement that he was ending talks with Democrats on the aid bill resulted in the stock market sliding. The bill will support Americans, struggling with unemployment, and help state and local governments to recover from the Covid-19 pandemic.
Data from the American Petroleum Institute, which revealed that US crude oil stocks increased by 951,000 barrels last week – more than anticipated, also played its part in the drop in oil prices.
Online brokerage chief market strategist AxiCorp Stephen Innes said: “(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.”
However, losses were limited by restrictions on the supply side.
Offshore oil and gas producers in the US Gulf of Mexico are shutting wells and evacuating workers due to Hurricane Delta storm, which turned into a major Category 4 hurricane.
The Lederne labour union in Norway said it will extend its ongoing oil strike from 10 October if a wage deal is not reached.
Earlier this week, six offshore oil and gas fields were closed, decreasing the country’s output capacity by 8%.