By Gina Lee
Investing.com – Oil was down on Wednesday morning in Asia in the wake of U.S. President Donald Trump canceling talks over the latest stimulus measures, as well as a larger-than-expected build in crude oil supplies.
Brent oil futures slid 1.83% to $41.87 by 10:37 PM ET (2:37 AM GMT) and WTI futures tumbled 2.14% to $39.80.
Trump ended talks over the package with Democrats on Tuesday via a tweet, and dashed hopes that it would be passed by Congress ahead of the Nov. 3 presidential elections.
The American Petroleum Institute (API) reported a build in crude oil inventories of 951,000 barrels for the week ending October 2 on Tuesday. Forecasts prepared by Investing.com predicted an 831,000-barrel draw.
Investors now await data from the U.S. Energy Information Administration (EIA), due later in the day.
“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,” AxiCorp chief market strategist Stephen Innes told Reuters.
However, events are shaping to restrict supply and capped further losses for the black liquid.
Hurricane Delta, heading towards the Gulf of Mexico, caused energy companies to secure offshore production platforms and evacuate workers on Tuesday ahead of the storm’s arrival. Some companies in the area, which accounts for 17% of total U.S. crude oil output, were shutting down for the sixth time in 2020.
Across the Atlantic, Norway’s Lederne labour union said on Tuesday that its ongoing oil strike would be further expanded from Oct. 10 unless a wage deal can be stuck before the deadline. The ramped-up strike saw six offshore oil and gas field closed on Monday, cutting the Norwegian output capacity by 8%.