Oil prices fell on Tuesday as demand concerns driven by COVID-19 outweighed hopes that U.S. lawmakers and the White House had been nearing an agreement for a brand new stimulus package to revive the world’s economy that is biggest.
U.S. West Texas Intermediate (WTI) crude (CLc1) futures slipped 17 cents, or 0.4%, to $40.43 at 0120 GMT, while Brent (LCOc1 that is crude futures also fell 17 cents, or 0.4%, to $42.26 a barrel. Both benchmarks rose about 1% on Monday.
Commodities markets had crept up in earlier trade as Democratic lawmakers unveiled a new $2.2 trillion coronavirus relief bill, which U.S. House of Representatives Speaker Nancy Pelosi said was a compromise measure.
“If it happens, the U.S. stimulus checks will go a way that is long shoring up U.S. oil demand at a most critical juncture and could move oil prices back into a pre-September frame of mind,” AxiCorp market strategist Stephen Innes said in a note.
Brent and WTI in August hit their highest levels since early March on optimism over rising fuel demand and oil that is major’ strong compliance with promised supply cuts, but have since dropped by about $3 on demand worries.
In the hit that is latest from a second revolution of COVID-19, in Canada the province of Quebec clamped down on bars and restaurants and social gatherings in homes, while the many populous province, Ontario, reported a new daily high of 700 cases.
An additional negative demand sign, crude imports in August to Japan, the world’s fourth customer that is biggest, slumped nearly 26%, government data showed on Tuesday.
The market will soon be looking for signs of U.S. demand growth in data due on from the American Petroleum Institute and the Energy Information Administration on Wednesday Tuesday.
Five analysts polled by Reuters on average estimate U.S. oil that is crude flower by 1.4 million barrels in the week to Sept. 25. They expect gasoline stockpiles fell by 1.6 million barrels and inventories that are distillate including diesel and jet fuel, fell by 800,000 barrels.
On the supply side traders were keeping an optical eye on clashes between Armenia and Azerbaijan over the Nagorno-Karabakh area. In the event that conflict escalates it could impact gas and oil exports from Azerbaijan, analysts said.
Azerbaijan’s main oil pipeline runs through Georgia to the Mediterranean that is Turkish coast. Oil prices fell on Tuesday as demand concerns driven by virus concerns.