Oil prices are down today with both Brent and WTI falling by about 0.5 percent to 71.10 and 69.90 dollars a barrel, respectively. The International Energy Agency (IEA) has remarked that the spread of the Delta variant of the coronavirus could slow the recovery of world oil demand. The IEA’s monthly report reads that rising oil demand reversed course in July and is expected to proceed more slowly for the rest of the year after the latest wave of COVID-19 infections pushed countries to introduce new restrictions. “We now estimate demand decreased in July as the rapid spread of the Delta variant of COVID-19 undermined deliveries to China, Indonesia and other parts of Asia,” notes the IEA which calculated a drop in demand for the month. last year at 120,000 barrels per day (bpd) and estimates that growth in the second half of the year will be half a million barrels per day lower than its estimate last month.
In contrast, the Organization of the Petroleum Exporting Countries (OPEC) has maintained its forecast of a strong recovery in world oil demand in 2021 and 2022, despite concerns about the spread of the virus.
Yesterday it emerged that the United States urged OPEC and its allies, known as OPEC +, to increase oil production to counter rising gasoline prices, which it sees as a threat to global economic recovery.