Oil prices fell today, Wednesday, with the continued rise in “Covid-19” infections in China, which raised fears of a drop in fuel demand in the world’s largest importer of crude.
This situation overshadowed concerns about rising geopolitical tensions and dwindling oil supplies.
Brent crude futures fell 0.6% to $93.26 a barrel by 05:01 GMT, while US West Texas Intermediate crude futures fell 0.8% to $86.23 a barrel.
Oil prices settled higher on Tuesday after oil supplies to parts of eastern and central Europe were temporarily suspended through part of the Druzhba pipeline, according to pipeline operators in Hungary and Slovakia.
The unrest coincided with an explosion in a village in eastern Poland near the Ukrainian border that killed two people and raised the prospect of a spillover of the Russia-Ukraine conflict.
In China, the increase in “Covid-19” infections is affecting sentiment despite the hopes that accompanied the easing of restrictions related to the Corona virus this week.
This weakened expectations of oil demand growth, as the International Energy Agency expected demand growth to slow to 1.6 million barrels per day in 2023 from 2.1 million barrels per day this year.
Earlier, the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth in 2022 for the fifth time since last April due to escalating economic challenges.
Industry data showed a larger-than-expected decline in US crude inventories, which provided some support for oil prices.
US crude oil inventories fell by about 5.8 million barrels in the week ending November 11, according to market sources, citing figures from the American Petroleum Institute.
In the United States, producer prices rose less than expected last October, indicating that inflation is beginning to recede, which may allow the Federal Reserve to slow the pace of interest rate hikes.