Oil falls on surprise build in U.S. crude stocks, Trump threat to U.S. relief spending

By Sonali Paul
MELBOURNE, Dec 23 (Reuters) - Oil fell in early trade on
Wednesday after industry data showed U.S. crude oil stocks rose
last week, defying expectations for a decline, and U.S.
President Donald Trump rattled markets by threatening not to
sign a long-awaited COVID-19 relief bill.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell
46 cents, or 1%, to $46.56 a barrel at 0142 GMT, while Brent
crude LCOc1 futures dropped 46 cents, or 0.9%, to $49.62.
Both contracts fell nearly 2% on Tuesday, in a second
straight session of declines, with Brent just managing to settle
above $50 ahead of the release of the data from the American
Petroleum Institute (API).
API reported crude inventories rose by 2.7 million barrels
in the week to Dec. 18, compared with analysts' expectations in
a Reuters poll for a decline of 3.2 million barrels.
"Rubbing salt in the oil market wounds today, oil prices
lurched lower after yet another inventory build that was very
much bearish to consensus," Axi chief market strategist Stephen
Innes said in a note.
Distillate stocks, which include diesel, heating oil and jet
fuel, rose by 1 million barrels, also a surprise against
expectations for a drawdown of 904,000 barrels.
However, gasoline stocks fell by 224,000 barrels, against
expectations for a build of 1.2 million barrels.
Oil fell further after Trump threatened not to sign an $892
billion coronavirus relief bill, saying he wants Congress to
increase the amount in the stimulus checks which lawmakers
approved on Monday. COVID-19 cases continued to surge in the United States, with
more than a million new cases in just six days, and Americans
were warned again to avoid travelling for Christmas, further
dampening fuel demand.
"If the U.S. goes back anywhere near the edge of the
COVID-19 lockdown abyss, it could be lights out for the oil
rally for at least another 4-8 weeks, not to mention a big price
wipe-out," Innes said.