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Oil futures were slightly lower Thursday after monthly reports from the International Energy Agency and the Organization of the Petroleum Exporting Countries raised concerns over prospects for demand growth.
In its monthly report, the Paris-based IEA said it “appreciably downgraded” its outlook for growth in demand this year by 100,000 barrels a day, while upgrading its outlook for 2022 by 200,000 barrels a day. Separately, OPEC left its forecasts for 2021 and 2022 growth unchanged, while lifting its projection of non-OPEC supply.
West Texas Intermediate crude for September delivery
CL00,
CLU21,
fell 36 cents, or 0.5%, to $68.87 a barrel on the New York Mercantile Exchange. October Brent crude
BRN00,
BRNV21,
the global benchmark, ws down 27 cents, or 0.4%, at $71.17 a barrel on ICE Futures Europe.
The IEA expects crude inventories in advanced economies to draw for the rest of 2021, “but with demand forecasted below 2019 levels throughout 2022, OPEC+ will likely have to pause its unwinding of output cuts in 2Q22 to bring the market into balance,” said Giacomo Romeo, analyst at Jefferies, in a note.
Crude saw volatile trade Wednesday after the Biden administration pressed OPEC+ to further raise output and called on the Federal Trade Commission to investigate whether any illegal conduct had contributed to rising gasoline prices.
Read: Biden takes aim at OPEC and gasoline prices — here’s why analysts are skeptical
“We imagine that there will be quite a lot of reluctance from the Saudis and the broader group to increase output further, particularly given continued uncertainty over the spread of the delta variant,” said Warren Patterson, head of commodities strategy at ING, in a note.
“We will need to see how much pressure the U.S. is willing to put on Saudi Arabia in order to see them further opening the taps,” he wrote.
