Oil steadied on Wednesday after earlier losses sparked by an unexpected rise in U.S. crude oil inventories, and as President Donald Trump rattled markets by threatening not to sign a long-awaited U.S. COVID-19 relief bill.
U.S. West Texas Intermediate (WTI) crude futures bumped up 83 cents, or 1.74% to $47.59 a barrel. Brent crude futures were up 74 cents, or 1.49% to $50.55 a barrel.
Both contracts fell nearly $1 earlier in the session.The American Petroleum Institute (API) reported on Tuesday that U.S. crude inventories rose by 2.7 million barrels last week, compared with analyst expectations for 3.2 million barrel draw.
“The API set the U.S. glut alarm bells ringing,” Stephen Brennock of oil brokerage PVM said.
Oil also took a hit after Trump threatened not to sign an $892 billion coronavirus relief bill, saying he wants Congress to increase the amount in the stimulus checks that lawmakers approved on Monday.
A weaker U.S. dollar, however, capped some losses. A weak greenback makes dollar-denominated commodities such as crude oil cheaper to holders of other currencies.
Supply disruptions in Nigeria also lent support.
ExxonMobil issued a force majeure on the Qua Iboe crude oil export terminal last week after a fire hit the facility and injured two workers.
A source told Reuters production is expected to resume in early January.
The stream was expected to load about 180,000 barrels per day (bpd) in December and 150,000 bpd in January.
Oil markets remain jittery about the future recovery of demand as a new, highly infectious strain of the novel coronavirus has hit Britain, prompting a slew of countries to shut their borders to the country.
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 Christmas travel, further dampening fuel demand.