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UPDATE 6-Oil falls 3% on U.S. stimulus impasse, stockpile rise

Published 10/07/2020, 02:55 PM
Updated 10/07/2020, 11:50 PM
© Reuters.
LCO
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* U.S. crude stocks edge up, fuel inventories dip -EIA
* Oil platforms shut in U.S. Gulf as Hurricane Delta
strengthens
* Norwegian union threatens strike escalation

(New throughout, updates prices, market activity and comments;
new byline, changes dateline, previous LONDON)
By Stephanie Kelly
NEW YORK, Oct 7 (Reuters) - Oil prices fell 3% on Wednesday
after U.S. President Donald Trump dashed hopes for another
stimulus package to boost the coronavirus-hit economy and after
U.S. crude inventories rose in the most recent week.
Brent crude LCOc1 futures were down $1.15, or 2.7%, to
$41.51 a barrel by 11:29 a.m. EDT (1529 GMT), while U.S. West
Texas Intermediate (WTI) crude CLc1 fell $1.21, or 3%, to
$39.48 a barrel.
White House Chief of Staff Mark Meadows on Wednesday said he
was not optimistic that a comprehensive deal could be reached on
further COVID-19 financial aid and that the Trump administration
backed a more piecemeal approach. "Trump pulling out of relief negotiations generates a lot of
uncertainty about the economy," said Harry Tchilinguirian, head
of commodities research at BNP Paribas.
Oil prices were also hit by a slightly larger-than-expected
build in U.S. crude inventories. Crude inventories USOILC=ECI
rose by 501,000 barrels in the week to Oct. 2 to 492.9 million
barrels, compared with analysts' expectations in a Reuters poll
for a 294,000-barrel rise.
Both gasoline and distillate inventories fell.
"The inability to coordinate another stimulus package is
having a negative impact on demand sentiment, but the data shows
that we perhaps have something to be encouraged about," said
Tony Headrick, energy market analyst at CHS Hedging.
Energy companies secured offshore platforms and evacuated
workers on Tuesday, some for the sixth time this year, as
Hurricane Delta threatened U.S. oil output in the Gulf of
Mexico.
The storm has shut 29% of offshore oil production in the
Gulf, which accounts for 17% of total U.S. crude output.
In Norway, the Lederne labour union said on Tuesday that it
will expand oil strike from Oct. 10 unless a wage deal can be
reached. Six offshore oil and gas fields shut down on Monday
because of the strike, cutting Norway's output capacity by 8%.

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