Oil prices fell on Friday but still managed to eke out a slight weekly gain at $68.44/bbl. This is as investors continued to weigh a bullishly tight global market. Mainly against the worrying spread of the coronavirus delta variant.
Oil prices have been highly volatile over the past few weeks. With the International Energy Agency (IEA) warning that the spread of the delta variant would slow.
Now, the global oil demand recovery in its latest report “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 wrote in its monthly oil report.
According to the IEA, last month’s demand slump clocked in at 120K bbl/day, and has forecast that growth would drop by ~500K bbl/day during the second half of the year compared to the group’s previous estimate.
The good news: The IEA has raised its oil price outlook for 2022.
Global oil demand is now seen rising 5.3 mb/d on average, to 96.2 mb/d in 2021, and by a further 3.2 mb/d in 2022. The IEA is also predicting that we could start to see a comeback of U.S. shale in the coming year, with supply from non-OPEC producers expected to rise by 1.7 mb/d in 2022, with the US accounting for 60% of the growth. Baker Hughes’ latest weekly survey found that the number of active, oil-targeted rigs in the U.S. jumped by 10 to a 16-month high 397 rigs.
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Source: Oil Price
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