SINGAPORE- 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 futures dropped by 6 cents, or 0.1 percent, to $93.80 a barrel, while US West Texas Intermediate (WTI) crude futures fell 4 cents, or 0.1 percent, 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 temporarily suspended, according to oil pipeline operators in Hungary and Slovakia.
This disruption came concurrent with an explosion in a village in eastern Poland near the Ukrainian border that killed two people, raising concerns that the Ukraine conflict could spill over its borders.
“Unconfirmed news about Russia’s missile attack on Poland has increased the risks of further sanctions on Russia by the US, 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 next year, the International Energy Agency said.
In China, rising COVID-19 cases are weighing on sentiment despite hopes of easing virus restrictions this the week.
