Oil fell in after industry data showed U.S. crude oil stocks rose last week, defying the expectations of a decline, on Wednesday. US President Donald Trump threatened not to sign a long-awaited COVID-19 relief bill which led to rattling the markets.
U.S. West Texas Intermediate (WTI) crude futures fell 46 cents, or 1%, to $46.56 a barrel, while Brent crude futures dropped 46 cents, or 0.9%, to $49.62. Both contracts fell nearly 2% on Tuesday with Brent managed to settle above $50.
“Rubbing salt in the oil market wounds today, oil prices lurched lower after yet another inventory build that was very much bearish to consensus,” said Axi chief market strategist Stephen Innes.
Diesel, heating oil and jet fuel, rose by 1 million barrels, which was a surprise as it was expected for a drawdown of 904,000 barrels. Gasoline stocks fell by 224,000 barrels, against expectations for a build of 1.2 million barrels.
However, after Trump threatened not to sign the Coronavirus relief bill stating that he wants Congress to increase the amount in the stimulus checks which lawmakers approved on Monday. A stiff drop was seen with the oil stocks in reaction to the stance taken by the serving President.
COVID-19 cases continued to surge in the United States, with more than a million new cases in just six days, and claiming lives of almost 318,000 Americans till now.
