(Bloomberg) — Oil clung to losses after U.S. government data showed the first crude stockpile gain in four weeks, adding to concerns over a demand recovery with stimulus talks in limbo.
Futures in New York fell as much as 3.4% on Wednesday. An Energy Information Administration report showed domestic crude inventories increased 501,000 barrels last week, while supplies at the nation’s biggest storage hub at Cushing, Oklahoma, climbed to the highest level since May.
At the same time, U.S. President Donald Trump’s decision to suspend fiscal relief talks until after the election is casting further doubt on energy demand bouncing back amid the pandemic. Reopening plans around the world are being thrown into question as global cases top 35 million.
This ended a trend of “fairly large declines,” said Rob Thummel, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. “There continues to be uncertainty associated with domestic demand and the need for fiscal stimulus to continue to boost the economy and correspondingly boost demand for crude oil.”
Oil’s retreat follows two sessions of gains, lifted by a workers’ strike in Norway and Hurricane Delta spurring Gulf of Mexico operators to shut output. Still, without a U.S. virus relief package, the demand outlook has only become dimmer. Governments around the world are trying to control the spread, with Brussels and Bucharest becoming the latest European capitals to impose restrictions on nightlife.
Trump in a series of Tuesday-night tweets called on Democrats to pass standalone bills. While House Speaker Nancy Pelosi signaled openness to a standalone airline relief bill in a telephone conversation with Treasury Secretary Steven Mnuchin on Wednesday, it is a far cry from the Democrats’ $2.2 trillion