By Barani Krishnan
Investing.com -- Oil prices fell as much as 4% on Tuesday on concerns about fuel demand after a new surge in U.S. and European coronavirus cases. Political uncertainties ahead of Tuesday night’s debate between President Donald Trump and his challenger Joe Biden added to investor anxiety.
Forecasts showing that U.S. crude stockpiles likely rose by 1.6 million barrels last week, offsetting the previous week’s draw of the same amount, also kept buyers off oil.
New York-traded West Texas Intermediate, the key indicator for U.S. crude prices, settled down $1.31, or almost 4%, at $39.29 per barrel. The slide comes after last week’s drop of 2.1% for WTI.
London-traded Brent crude, the global benchmark for oil, settled down $1.41, or 3.3%, at $41.03. Last week, Brent lost 3%.
“The evolving COVID landscape is a massive downside risk for crude prices,” said Craig Erlam, an analyst at OANDA in New York.
“We're just over a month away from what is going to be an election for the ages. COVID has turned the election on its head. A year ago, Trump had it in the bag. Now he has a significant deficit to make up and already election day is surrounded in controversy. A tightening of the polls over the next month will only add to the drama.”
The state of the economy, the handling of the Covid-19 pandemic and issues of racial inequality and law and order are likely topics in Tuesday's debate between Trump and Biden. Hours ahead of the debate, Biden also released his tax returns — a move that could add pressure on the president, who has not done the same. The New York Times ran a story Sunday citing tax records they obtained that show Trump underpaid or paid no taxes for many years.
On the Covid-19 front, more than 1 million people worldwide have died, according to a Reuters tally, a bleak milestone in a pandemic that has devastated the global economy, particularly in the West, and its demand for fuel.
New York City will impose fines on people who refuse to wear a face covering as the rate of positive coronavirus tests climbed above 3% for the first time in months, Mayor Bill de Blasio said on Tuesday.