Oil prices slipped on Wednesday with forecasts of a buildup in US crude inventories, stoking investor fears of a fall in demand in the world's largest oil-consuming nation.
International benchmark Brent crude was trading at $42.80 per barrel at 0639 GMT for a 0.83% decrease after closing Tuesday at $43.16 a barrel.
American benchmark West Texas Intermediate (WTI) was at $41.41 a barrel at the same time for a 0.70% decrease after ending the previous session at $41.70 per barrel.
Late Wednesday, the American Petroleum Institute (API) announced its estimate of an increase of 584,000 barrels in US crude oil inventories against the market expectation of a draw of one million barrels.
If crude stocks increase in line with the API's expectations, it signals a fall in crude demand in the US to push prices down.
The Energy Information Administration will release official data on the weekly change of US crude oil stocks later on Wednesday.
Weak global oil demand concerns caused by the second wave of the novel coronavirus (COVID-19) outbreak is also contributing to price declines.
The rebound in cases in Europe and North America has sparked renewed lockdown measures. Many European countries are tightening lockdowns to curb the spread of the virus, which has now reached over 40.7 million, according to the latest data from Johns Hopkins University.
While the US still tops the number of cases above 8.2 million as of Wednesday morning, India's cases now total over 7.6 million, and Brazil follows with over 5.2 million cases.
Moreover, increased production from Libya, which is excluded from the current output cut deal of the OPEC+, is intensifying oversupply concerns and fuels oil price declines.
Oil production in Libya, which had been interrupted since January due to conflicts in the country, restarted from its largest field Sharara on Oct. 11.
Further price declines, however, were limited by signals from the White House and Democrats of developments in moving closer to a new COVID-19 relief bill deal that could boost demand.
Investors are following negotiations between US House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin over the aid package, as the parties try to bridge the gap between the Republicans' $1.8 trillion bid and Pelosi's $2.2 trillion offer.
US lawmakers approved more than $3 trillion in aid since March when the coronavirus began to take a toll on the world's largest economy, but it has been more than six months since the release of the last relief package.
By Firdevs Yuksel