Oil falls on easing geopolitical tensions, China demand worries

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Oil slipped on Thursday, pressured by easing concerns over geopolitical tensions and Chinese demand worries, although signs of tighter supply including lower U.S. inventories lent support.

Poland and NATO said on Wednesday a missile that crashed inside NATO member Poland was probably a stray fired by Ukraine’s air defences and not a Russian strike, easing fears of the war between Russian and Ukraine spilling across the border.

Brent crude was down 43 cents, or 0.5%, to $92.43 a barrel while U.S. West Texas Intermediate (WTI) crude also slid 43 cents, or 0.5%, to $85.16.

Concern about weak demand in China, the world’s largest crude importer, also weighed on the market.

China on Thursday reported rising daily COVID-19 infections. Chinese refiners have asked to reduce Saudi crude volume in December, Reuters has reported, and are also slowing Russian crude purchases.

While China’s COVID caseload is small compared with the rest of the world, it maintains stringent policies to quash out cases before they further spread, dampening fuel demand.

Oil gained some support from official figures that U.S. crude stocks fell by more than 5 million barrels in the most recent week, more than analysts had forecast.

Supply is also tightening in November as OPEC and its allies, known as OPEC+, implement their latest output cut aimed at supporting the market. (Additional reporting by Emily Chow and Jeslyn Lerh; Editing by Mark Potter)




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