Oil prices fell by more than 1% following an industry report that revealed an increase in crude oil stocks in the US.

The oil market was also under pressure when President Donald Trump threatened not to sign the long-awaited $892bn Covid-19 relief bill.

Brent crude futures dropped by 71 cents, or 1.4%, to $49.37 a barrel at 6:46am GMT, while US West Texas Intermediate (WTI) crude futures fell 67 cents, or 1.4%, to reach at $46.35 a barrel, reported Reuters.

The oil market is also concerned over the future recovery of fuel demand with a new, highly infectious strain of Covid-19 affecting the UK, which has subsequently led several countries in the world to close their borders to the UK.

Kotak Securities commodities vice-president Ravindra Rao was quoted by the news agency: “This is the holiday period, when people go out and that prompts fuel demand. But now, a majority of flights have been cancelled to and from the UK, so this is going to impact oil demand (overall).

“Sometime earlier, the expectation was that the virus threat was subsiding, and demand was slowly and slightly moving higher. But with this update of the new coronavirus strain, the market is purely operating on sentiment right now that it is going to create more restrictions,”

On 22 December, the American Petroleum Institute (API) stated that the crude stocks in the US have increased by 2.7 million barrels in the week to 18 December.

Axi chief market strategist Stephen Innes in a note to the news agency said: “Rubbing salt in the oil market wounds today, oil prices lurched lower after yet another inventory build that was very much bearish to consensus.”

President Trump also threatened not to sign the coronavirus relief bill, stating that US Congress needs to increase the amount in the stimulus cheques.