(New York) Oil prices fell on Wednesday, a backlash to Tuesday’s heat stroke following news of a missile fall in Poland, ultimately attributed to Ukraine’s air defense by several officials.
The price of a barrel of Brent North Sea oil for January delivery fell 1.06% to close at $92.86.
The barrel of American West Texas Intermediate (WTI), for delivery in December, fell 1.53% to 85.59 dollars.
On Tuesday, the market had recovered after the announcement of the fall of a missile near the border between Poland and Ukraine, a time attributed to Russia by a US intelligence official.
Polish President Andrzej Duda, however, considered “highly probable” that it was a projectile used by Ukraine as an anti-aircraft defense against Russian attacks, a scenario validated by NATO and the White House.
These clarifications may have triggered sales in the black gold market, said Andrew Lebow of Commodity Research Group, even though Ukrainian President Volodymyr Zelensky said on Wednesday that the missile was Russian.
There was little reaction from brokers to news that U.S. crude trading inventories fell much more than expected last week, to 5.4 million barrels from an expected 1.9 million.
“I imagined the market doing better than that” and recovering after this publication, theoretically likely to support prices, because it shows an increased appetite for American crude, reacted Andrew Lebow.
But the report also showed a slowdown in demand for gasoline, diesel and heating oil in the United States, as well as an increase in corresponding inventories.
These signals of sluggish demand for refined products “took over”, according to Andrew Lebow, in a context of apprehension about a possible slowdown in global demand, against a backdrop of degraded economic conditions.
“The market is focusing on the elements that are pushing down, such as poor macro data in China and demand,” said Matt Smith of Kpler.
The announcement that an oil tanker had been hit by a projectile on Tuesday, attributed to Iran by Washington, off the coast of Oman, did not help prices to firm up either.
For Andrew Lebow, the market could also suffer from a withdrawal of speculative operators, who had positioned themselves massively on the rise for several weeks, but were tired of waiting for a surge that never came.