NEW YORK – Oil prices fell about 1% on Tuesday after rising earlier in the session as hopes dimmed for a swift stimulus package to relieve the U.S. economy as coronavirus cases increased globally.
Brent crude LCOc1 futures fell 49 cents, or 1.1%, to settle at $44.50 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 33 cents, or 0.8%, to finish at $41.61 a barrel.
Some profit-taking ahead of weekly U.S. oil inventory data weighed on prices. Crude and gasoline inventories were seen declining last week, while distillates probably built, a Reuters poll showed ahead of industry data later on Tuesday, followed by the government’s report on Wednesday.
The U.S. Senate’s top Republican and Democrat criticized each others’ approach to coronavirus aid on Tuesday, with no word on when talks on a new package might resume and no movement on benefits for tens of millions who lost jobs in the crisis.
“Now there’s doubt coming out on the stimulus package and the Russian news as well,” said Gary Cunningham, director of market research at Tradition Energy.
President Vladimir Putin claimed on Tuesday Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval has concerned some experts as the vaccine still must complete final trials.
Still, signs of recovering Asian oil demand helped market sentiment.
On Sunday, Saudi Aramco CEO Amin Nasser said he expects oil demand to rebound in Asia as economies open up.
China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, adding to signs of recovery in the world’s second-largest economy.
Prices also found support from a rally in European stocks, which rose for a third straight session as automakers gained on firm Chinese sales data.
Meanwhile, European refinery crude intake in July rose 3.3% from June, Euroilstock data showed.
U.S. passenger airline traffic, which was slammed by the pandemic, was down 80% year on year in June, official figures showed, but was still nearly twice the levels in May.
Energy companies have begun taking back millions of barrels of oil from the U.S. government’s emergency stockpile after renting storage to manage a glut of crude this spring after energy demand collapsed during coronavirus lockdowns, a Department of Energy website showed on Monday.