The price of oil continued to fall on Thursday as anxieties about global unrest subsided and concerns about demand in China, the world’s largest petroleum importer, increased because of an increase in COVID-19 cases.
Fears of the conflict between Russia and Ukraine spilling over the border were eased when Poland and NATO indicated that the missile that landed inside the NATO member was fired by Ukrainian air defenses and not a Russian attack. According to Edward Moya, senior market analyst at OANDA, it appears we don’t see a rapid escalation from the Russians, which has provisionally eliminated some of the short-term supply issues.
What Is Happening Inside the Market?
At 1137 GMT, Brent crude prices were down $1.30, or 1.4%, to $91.56 per barrel. West Texas Intermediate (WTI) crude for the United States fell $1.42 or 1.7% to $84.17. China’s poor demand affected the market.
China reported an increase in COVID-19 infections on Thursday. According to the data, Chinese refiners are reducing their imports of Russian oil and have requested a reduction in the supply of Saudi crude in December. According to Tamas Varga of oil trader PVM, stagnant Chinese consumption is due to sinking domestic demand for both Russian and Saudi crude oil. China has fewer COVID instances than the rest of the globe, but it still has strict controls to stop cases from spreading and lowering fuel consumption.
Official data showing that U.S. crude stockpiles dropped by more than 5 million barrels in the most recent week—more than experts had predicted—helped the oil market. As OPEC and its partners, known as OPEC+, implement their most recent output reduction intended to bolster the market, supply is also becoming tighter in November.