As geopolitical concerns eased, oil investors shifted their views back to the demand outlook, and oil fell, extending its losses.

West Texas Intermediate fell to nearly $84 per barrel, after dropping 1.5% Wednesday.

Affecting investor sentiment was a JPMorgan Chase projection showing the US will enter a “mild” recession next year produced by the interest rate hikes of the Federal Reserve, as well as a rising number of Covid cases in China, which are increasing the likelihood of a lockdown. Earlier in the week OPEC cut its demand forecast.

There was a brief fear that a missile which struck Poland and killed two people had been launched by Russia, which could have formed the basis for an Article V expansion of the war, bringing in NATO forces in a direct clash with Russia. However subsequent analysis showed that despite Ukraine’s denials, the missile appeared to have been Ukrainian. After a short power outage, the Druzhba oil pipeline which carries oil to the West was restarted, as the possibility of a greater expansion of the war abated.

Warren Patterson, head of commodities strategy at ING Groep NV. said, “With geopolitical risks having subsided somewhat, demand concerns have once again taken center stage for the oil market. Chinese demand remains a concern.”

Although the closely watched time spreads remain in backwardation, there has been some narrowing in recent sessions. The prompt-spread of Brent – a measure of the closeness of its two nearest contracts – was $1.19, in backwardation. At the beginning of the month it had been at $1.86.

Prices appeared little-affected by news that commercial stockpiles fell by 5.4 million barrels last week, marking the biggest weekly decline since August. Complicating the demand picture is the intent of the European Union to officially sanction Russian crude supplies starting in December.