Oil Falls a 2nd Day After IEA Warns of Slowdown in Demand

Oil prices fell for a second day on Friday after the International Energy Agency warned that demand growth for crude and its products had slowed sharply, as surging cases of Covid-19 worldwide have forced governments to revive restrictions on movement.
Brent crude was down 31 cents, or 0.4%, at $71 a barrel, after dropping 13 cents in the previous session. US crude 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, Reuters reported.
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 IEA said.
“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, the Organization of Petroleum Exporting Countries 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, OPEC also raised its expectations for supplies next year from other producers, including US shale drillers, which could potentially snarl efforts by the group and allies, known as OPEC+, to achieve a balance in the market.