- IEA says Delta variant will slow recovery in demand
- OPEC sticks to forecasts of strong recovery in demand
- US calls on OPEC and its allies to pump more oil
NEW YORK, Aug.12 (Reuters) – Oil prices fell on Thursday after the International Energy Agency (IEA) said the spread of the Delta variant of the coronavirus would slow the recovery in global demand for oil. Read more
Brent crude futures fell 45 cents to $ 70.99 a barrel at 11:09 a.m. EDT (3:09 p.m. GMT). Earlier, Brent hit a session high of $ 71.90.
US West Texas Intermediate (WTI) crude futures fell 47 cents to $ 68.78 a barrel.
The international energy watchdog’s monthly report says growing demand for oil reversed in July and is expected to continue more slowly for the rest of the year after the latest wave of COVID infections -19 prompted countries to re-introduce restrictions.
“Growth for the second half of 2021 has been more sharply degraded, as new COVID-19 restrictions imposed in several major oil-consuming countries, especially in Asia, are expected to reduce mobility and oil consumption,” the AIE based in Paris.
“We now estimate that demand fell in July as the rapid spread of the COVID-19 Delta variant compromised deliveries to China, Indonesia and other parts of Asia. “
The IEA estimated the drop in demand last month at 120,000 barrels per day (bpd) and predicted growth would be half a million bpd lower in the second half of what it estimated in the month. last, noting that some changes were due to data revisions.
“The IEA report seemed to suggest that we would see demand weaken a bit due to the COVID outbreak and because it would reduce the chances of a so-called oil super cycle,” said Phil Flynn, senior analyst at Price Futures. Group in Chicago.
In its monthly report, also released on Thursday, the Organization of the Petroleum Exporting Countries (OPEC) stands by its prediction of a strong recovery in global oil demand in 2021 and 2022, despite concerns about the spread of the virus. . Read more
It came a day after the United States urged OPEC and its allies, known as OPEC +, to increase oil production to deal with rising gasoline prices, which they see it as a threat to the global economic recovery. Read more
OPEC agreed in July to increase production each month by 400,000 bpd from the previous month, starting in August, until the remainder of their record cuts of 10 million bpd, or about 10 % of global demand, achieved in 2020 be gradually phased out.
“The Biden administration has said the recently agreed production increases will not fully offset previous production cuts imposed during the pandemic,” ANZ said in a note.
Additional reporting by Jessica Jaganathan; Editing by Barbara Lewis, Pravin Char, David Evans and David Gregorio
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