Brent crude futures LCOc1 were at $42.53 a barrel, down 63 cents, or 1.46%, as of 1349 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 futures slipped 75 cents, or 1.8%, to $40.95. Both benchmarks rose in the previous session.
“Lower European equity markets and a surprise crude build are in my view the factors weighing on oil prices today. The market is probably also wanting to see if the EIA confirms the API report later today and any news on a fiscal package in the U.S.,” Giovanni Staunovo, analyst at UBS Bank, said.
Crude inventories rose by 584,000 barrels in the week to Oct. 16 to 490.6 million barrels, data from industry group the American Petroleum Institute (API) showed, compared with analysts’ expectations in a Reuters poll for a draw of 1 million barrels.
Adding to pressure, worldwide COVID-19 cases crossed 40 million on Tuesday, with some parts of Europe imposing renewed lockdown measures.
On the supply side, Russia’s energy minister said on Tuesday it was too early to discuss the future of global oil production curbs beyond December, less than a week after saying plans to scale back existing output restrictions should proceed.
Earlier this year the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia – together known as OPEC+ – agreed to trim production cuts in January from a current 7.7 million barrels per day (bpd) to roughly 5.7 million bpd.
At the same time, OPEC member Libya, which is exempt from the cuts, is also ramping up production after armed conflict shut almost all its output in January. Production has recovered to about 500,000 bpd with Tripoli expecting that figure to double by year-end.
The battle over a hefty, new U.S. coronavirus aid bill was set to spill into Wednesday as the White House and Democrats try to strike a deal before the Nov. 3 presidential and congressional elections, now with the encouragement of President Donald Trump.
*Yuka Obayashi; Editing: Kenneth Maxwell, Christian Schmollinger, Alexandra Hudson, Louise Heavens & Giles Elgood – Reuters
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