Oil was down Friday morning in Asia as concerns over the spread of Covid-19 globally continue to cloud the fuel demand outlook.
Brent oil futures were down 0.57% to $70.90 by 12:12 PM ET (4:12 AM GMT) and WTI futures fell 0.62% to $68.66.
“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 analysts said in a note.
Fuel demand growth ground to a halt in July and is expected to slow down for the rest of 2021 thanks to the spread of Covid-19 cases involving the Delta variant globally, the International Energy Agency (IEA) said on Thursday.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for a rebound in oil demand globally in 2022 and further growth in 2022 in its monthly report, released on Thursday.
The cartel also raised its expectations for supplies in 2022 from other producers, including US shale drillers. This could undermine efforts by OPEC and allies, or OPEC+, to balance 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,” Capital Economics chief commodities economist Caroline Bain said in a note.