Oil closes down due to geopolitical tension and uncertainties about the global economy

Oil futures closed lower in the session this Wednesday (16), after oscillating between highs and lows, with the market digesting data on inventories in the US, the increase in geopolitical tensions and the prospects for the world economy in the coming months.

On the New York Mercantile Exchange (Nymex), WTI crude for December closed down 1.53% ($1.33) at $85.59 a barrel, while Brent for January 2023 traded on the Intercontinental Exchange (ICE) fell 1.07% ($1.00) to settle at $92.86 a barrel.

Crude oil trimmed earlier session losses after the US Department of Energy released its weekly inventory data. Oil stocks fell farther than expected, but increases in gasoline and distillate inventories came as a surprise.

Oil fluctuated between the negative and positive fields today, influenced by increased geopolitical tensions, after a missile crossed Ukraine’s border with Poland.

This morning, the secretary general of the North Atlantic Treaty Organization (NATO), Jens Stoltenberg, said that there was no “deliberate attack” by Russia on Poland, but blamed Putin for the “illegal war” that provoked such a situation. Ukrainian President Volodymyr Zelensky has called for further investigations into claims that the projectile that hit Poland was Ukrainian.

According to Hungary, flow in a pipeline that takes oil from Russia to Central Europe via Ukraine has resumed. THE Associated Press informs that operations were restarted after the structure underwent repairs, due to damage resulting from the war.

Business on the oil market was also influenced by the news that an Israeli oil tanker was attacked by an Iranian drone in the Gulf of Oman, according to international press reports.

Also remaining on investor radar is the easing of Covid-19 restrictions in China, which fuels doubts about the prospects for the world economy and the balance between supply and demand for oil.