UPDATE 1-Oil prices slip as China COVID worries, firmer dollar outweigh supply concerns
Adds details, analyst comments, updates prices
By Isabel Kua
SINGAPORE, Nov 16 (Reuters) - Oil prices slid on Wednesday as COVID-19 cases in China continued to climb, sparking worries of lower fuel demand in the world's top crude importer that outweighed concerns about an escalation of geopolitical tensions and tighter oil supply.
Brent crude LCOc1 futures dropped by 60 cents, or 0.6%, to $93.26 a barrel by 0501 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 69 cents, or 0.8%, to $86.23 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.
The disruption came concurrent with anin a village in eastern Poland the Ukraine border that killed two people and raised the possibility that the Russian-Ukraine conflict could spill over.
But after the initial "knee-jerk rally in oil prices, the tepid market follow-through reflects the significant prudence that will be taken to avoid an escalation," said Stephen Innes, managing partner at SPI Asset Management.
U.S. Presidentthat the missile was probably fired from Russia also helped to ease immediate escalation worries, Innes said.
In China,are weighing on sentiment despite the hopes raised by easing virus restrictions this week.
That has dampened the oil demand growth outlook, with the International Energy Agency (IEA) forecastingto slow 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 globalfor a fifth time since April citing mounting economic challenges.
The safe-havenalso firmed as markets took stock of geopolitical risks. A stronger U.S. dollar makes dollar-denominated commodities more expensive for holders of other currencies and tends to weigh on oil and other risk assets.
Industry data showing a bigger-than-expected drop in U.S. crude stockpiles provided some support to oil prices. API/S
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). EIA/S
In the United States, producer pricesin October, suggesting inflation was starting to ease, which may allow the Federal Reserve to slow its aggressive pace of interest rate hikes.
(Reporting by Isabel Kua; Editing by Tom Hogue)