Market

Oil falls a second day after IEA warns of slowdown in demand By Reuters

© Reuters. A man holds a fuel pump at a gas station in Rio de Janeiro, Brazil July 8, 2021. REUTERS/Amanda Perobelli/Files

By Aaron Sheldrick

TOKYO (Reuters) – Oil prices fell for a second day on Friday after the IEA warned that demand growth for crude and its products had slowed sharply as surging cases of COVID-19 worldwide has forced governments to revive restrictions on movement.

was down 31 cents, or 0.4%, at $71.00 a barrel by 0046 GMT, after dropping 13 cents in the previous session. was off by 33 cents, or 0.5%, at $68.76 a barrel, having fallen 0.2% on Thursday. The benchmarks are still heading for a slight gain this week.

“We now see the global demand recovery stalling this month with oil demand only reaching 98.3 million barrels per day (mbd) in August and averaging 97.9 mbd in September, on par with the nearly 98 mbd average in July,” JPM Commodities Research said.

Increasing demand for crude ground to a halt in July and is set to rise at a slower pace over the rest of 2021 because of the surge in infections from the Delta variant of the coronavirus that causes COVID-19, the International Energy Agency (IEA) said on Thursday

“Growth for the second half of 2021 has been downgraded more sharply, as new COVID-19 restrictions imposed in several major oil consuming countries, particularly in Asia, look set to reduce mobility and oil use,” the IEA said.

In sharp contrast, OPEC on Thursday held to its forecasts for a rebound in oil demand globally this year and further growth in 2022, notwithstanding the rising concern about the surge in COVID-19 infections.

In its monthly report, the Organization of the Petroleum Exporting Countries (OPEC) also raised its expectations for supplies next year from other producers, including U.S. shale drillers, which could potentially snarl efforts by the group and allies, known as OPEC+, to achieve a balance in the market.

“Although OPEC left its demand forecast unchanged, we think that the near-term demand outlook has deteriorated, which may mean that the group adjusts down its supply plans at its next meeting,” Caroline Bain, chief commodities economist at Capital Economics, said in a note.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Most Related Links :
reporterwings Governmental News Finance News

Source link

Back to top button