Oil prices steady as China COVID worries outweigh supply concerns
By Isabel Kua
SINGAPORE, Nov 16 (Reuters) - Oil prices were little changed on Wednesday as COVID-19 cases in China continued to climb, sparking worries of lower fuel demand in the world's top crude importer, and outweighing concerns about an escalation of geopolitical tensions and tighter oil supply.
Brent crude LCOc1 futures dropped by 6 cents, or 0.1%, to $93.80 a barrel by 0148 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 4 cents, or 0.1%, to $86.88 a barrel.
Oil prices settled higher on Tuesday after oil supply to parts of Eastern and Central Europe via a section of the Druzhba pipeline was, according to oil pipeline operators in Hungary and Slovakia.
This disruption came concurrent with anin a village in eastern Poland the Ukrainian border that killed two people, raising concerns that the Ukraine conflict could spill over its borders.
"Unconfirmed about Russia’s missile attack on Poland has increased the risks of further sanctions on Russia by the U.S., EU and allies, which may worsen oil supply issues, putting upside pressure on the oil prices," CMC Markets analyst Tina Teng said.
Sanctions on Russian oil could lead to a 1.4 million barrels per day loss of supplies year, thesaid.
In China,are weighing on sentiment despite hopes of easing virus restrictions this the week.
That has dampened oil demand growth outlook with the International Energy Agency (IEA) forecastslowing to 1.6 million bpd in 2023 from 2.1 million bpd this year. Earlier, the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for 2022 global for a fifth time since April citing mounting economic challenges.
Industry data showing a bigger-than-expected drop in U.S. crude stockpiles provided some support to oil prices.
fell by about 5.8 million barrels for the week ended Nov. 11, according to market sources citing American Petroleum Institute figures.
By comparison, seven analystsestimated on average that crude inventories dropped by about 400,000 barrels.
Official U.S. inventory data from the Energy Information Administration is due at 10:30 a.m. EST (1530 GMT).
In the U.S., producer pricesin October, suggesting that inflation was starting to ease, which may allow the Federal Reserve to slow its aggressive pace of interest rate hikes.
(Reporting by Isabel Kua)