Futures Movers: Oil futures fall as risks to global supplies, after missile strike in Poland, ease for now

by | Nov 16, 2022 | Stock Market

Oil futures headed lower on Wednesday after Poland and NATO reportedly said there was no indication that Russia was behind a missile strike in Poland, easing worries about risks to crude supplies in the region. Prices for oil in Europe, meanwhile, got a brief boost after reports of a drone strike on an oil tanker off the coast of Oman.

Trader also weighed U.S. government data released Wednesday showing a larger-than-expected weekly decline in domestic crude inventories, along with gains in gasoline and distillate stocks.
West Texas Intermediate crude for December delivery 
fell $1.59, or 1.8%, to $85.33 a barrel on the New York Mercantile Exchange after gaining 1.2% on Wednesday.

January Brent crude 

declined by $1.21, or 1.3%, to $92.65 a barrel on ICE Futures Europe.

December gasoline
 lost 1.2% to $2.4861 a gallon, while December heating oil
 traded at $3.623 a gallon, down 0.5%.

December natural gas 
 was down 3.4% at $5.832 per million British thermal units.

Market drivers Tuesday’s “geopolitical fear bid related to the initially unidentified missiles hitting Poland is unwinding as details emerge that suggest the projectiles did not actually originate in Russia after all,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. A missile had landed in Polish farmland Tuesday, killing two people, but Poland said Wednesday that there was no indication that the missile was an intentional attack on the NATO country, according to a report from The Associated Press. Polish President Andrzej Duda said it was highly probable that one of Ukraine’s defense missiles had fallen on Polish territory, and NATO Secretary-General Jens Stoltenberg, agreed with the assessment, the report said. An “uptick in geopolitical risk” had helped drive oil prices higher late Tuesday, following news of the missile strike in Poland, said Stephen Innes, managing partner at SPI Asset Management, in a market update. With “crude oil at the epicentre of Eastern European risk oil,” traders had little choice but to “graduate what-if scenarios hedging the potential risk to global oil supplies” if a smouldering powder keg ignites, he said. Also early Wednesday, oil prices in London briefly saw some support, said Innes, after an oil tanker associated with an Israeli billionaire was struck by bomb-carrying done of the coast of Oman amid heightened tensions with Iran, an official told The Associated Press. But “these lone-wolf attacks tend to be less influential or have long legs,” said Innes, given that “China’s COVID-19 cases continue to rise, suggesting more lockdowns ahead of the holiday and flu season.” Oil traders on Tuesday had spent the bulk of the session digesting information from the International Energy Agency’s latest monthly oil report. The Paris-based agency warned that more than 1 million barrels a day of Russian oil exports will be upended within weeks, with a European ban on Russia crude oil imports and a plan to cap prices for Russian crude-oil sales going into effect. It also raised its global oil demand forecast for this year by 170,000 barrels a day to 99.8 million barrels a day and for next year by 130,000 barrels a day to 101.4 million barrels a day. …

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