- Oil drop on Friday but little change during the week
- Spread of COVID-19 Delta variant reduces outlook for oil demand – IEA
- Banks are also lowering their short-term demand forecasts
- Largest weekly rise in U.S. oil rigs since April – Baker Hughes
NEW YORK, Aug. 13 (Reuters) – Oil prices fell on Friday and ended the week without much change after resisting concerns from banks and the International Energy Agency that the spread of coronavirus variants is slowing demand for oil.
Global benchmark Brent crude oil stood at 72 cents, or 1%, at $ 70.59 a barrel for the session. US West Intermediate crude came in at 65 cents at $ 68.44.
For the week, Brent fell less than 1%, after falling 6% last week, its strongest week of losses in four months. Last week, WTI fell nearly 7% in its biggest weekly decline in nine months. Read more
On Thursday, the IEA said demand for crude oil came to a standstill in July and is expected to increase at a slower pace for the remainder of the year due to the surge in infections of the Delta variant of the coronavirus. . Read more
Still, oil has remained supported by improving demand from the world’s largest consumer, the United States and other countries with higher COVID-19 vaccination rates.
“Although the IEA report is rather stark on demand, in the short term it is pretty clear that there is a supply gap and this is likely to continue as we see airline travel restrictions being raised in the United States, ”said John Kilduff, partner of Again Capital LLC in New York.
Big banks Goldman Sachs and JPM Commodities Research are less bullish on oil due to the rising infection rate.
Goldman reduced its estimate of the global oil deficit to 1 million barrels per day, from 2.3 million barrels per day in the short term, citing an expected drop in demand in August and September.
However, Goldman expects the recovery in demand to continue alongside rising vaccination rates.
“A recent flow of favorable macroeconomic forecasts in the United States also suggests further improvement in demand for oil once the Delta variant calms down,” said Jim Ritterbusch, president of Ritterbusch and Associates LLP in Galena, Illinois.
JPM, meanwhile, said he now sees the “recovery in global demand stalled this month”, with demand remaining roughly in line with the 98 million bpd average for global consumption in July. .
In contrast, the Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecast of a rebound in global oil demand this year and further growth in 2022 on Thursday, despite growing concerns over surges. of COVID-19.
U.S. energy companies have added the most oil rigs in a week since April, with the total rig count more than doubling from a record low a year ago, energy services company Baker said. Hughes Co BKR.N. Read more
U.S. oil rigs rose 10 to 397 this week, their highest since April 2020, and up from 172 a year ago, which was their lowest since 2005 before the shale boom boosted activity .
The combined number of oil and gas rigs, an early indicator of future production, rose from nine to 500 in the week to August 13, putting it up 105% from a record low in 244 around the same time last year, according to data from Baker Hughes. date back to 1940.
Additional reporting by Shadia Nasralla, Aaron Sheldrick and Florence Tan Editing by Marguerita Choy, Jane Merriman and David Gregorio
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