NEW YORK: Oil prices rose more than 2% on Tuesday, supported by expected supply disruptions from a hurricane approaching the Gulf of Mexico and an oil worker strike in Norway.
The market slipped in post-settlement trading, however, after U.S. President Donald Trump said he was instructing his administration not to negotiate a stimulus package until after the Nov. 3 election.
Brent crude futures settled at $42.65 a barrel, up $1.36 a barrel, or 3.29%. U.S. West Texas Intermediate (WTI) crude settled at $40.67 a barrel, rising $1.45, or 3.7%. In post-close trading, however, Brent fell to $42.19 while U.S. crude dropped to $40.13 a barrel.
Trump returned to the White House following three days in the hospital for treatment for COVID-19. U.S. House Speaker Nancy Pelosi and U.S. Treasury Secretary Steven Mnuchin had been in negotiations for an additional $1.5 trillion to $2 trillion in economic stimulus before Trump’s tweet.
“It looked like something was going to materialize, and now it has been blown up so everything is selling off,” said John Kilduff, partner at Again Capital LLC in New York.
“The petroleum complex needed that stimulus to help stoke demand once again, and we’re obviously not getting it.”
Energy companies shut offshore oil platforms as Hurricane Delta strengthened to a Category 2 and was on track to reach the Gulf of Mexico on Thursday. It would be the 10th named storm to hit the United States this year, which would break a record dating back more a century.
Royal Dutch Shell Plc said it was evacuating nonessential workers from all nine of its offshore Gulf of Mexico operations and preparing to shut production. Equinor ASA and BHP Group Ltd also shut in production and evacuated workers.
Norway’s petroleum output is down 8% due to an oil worker strike. A major labor union in the country is trying to resolve the dispute with oil companies, which have shut six offshore oil and gas fields.
(Additional reporting by Ahmad Ghaddar, Sonali Paul in Melbourne and Seng Li Peng in Singapore; Editing by David Gregorio, Marguerita Choy, David Goodman and Sonya Hepinstall)
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