Oil drops below $70 as US urges OPEC+ to pump more

LONDON: Oil fell below $70 a barrel on Wednesday as the United States urged OPEC and its oil-producing partners to boost output, saying current production was not enough and could threaten the global economic recovery.

The price of Brent crude is up 35% this year supported by OPEC-led supply curbs, even after oil last week suffered the steepest weekly loss in months on worries that travel restrictions to curb coronavirus infections would hit demand.

Brent crude was down 75 cents, or 1.1%, to $69.88 a barrel at 1126 GMT, following a 2.3% rally on Tuesday. US West Texas Intermediate (WTI) was down 81 cents, or 1.2%, to $67.48, after a 2.7% jump on Tuesday.

The White House said in a statement on Wednesday that the Biden administration had urged OPEC and its partners to boost production. CNBC earlier reported the development.

US calls on OPEC and its allies to increase oil production

Earlier on Wednesday, crude was trading above $70 as signs of rising fuel demand in the United States offset concerns about travel curbs in Asia caused by the COVID-19 Delta variant.

Industry data showed US crude and gasoline inventories fell last week, while the US Energy Information Administration (EIA) said US job growth and increasing mobility had boosted gasoline consumption so far this year.

"The EIA's upbeat demand forecasts for this year helped alleviate fears of a deteriorating near-term outlook," said Stephen Brennock of oil broker PVM.

The Delta variant has been detected in more than a dozen Chinese cities since the first cases there were found in July, prompting some new travel restrictions, while US cases and hospitalisations have soared to six-month highs.

Oil prices rises, on track for weekly gain

In focus later will be the EIA's official US inventory figures at 1430 GMT.

On Tuesday, industry group the American Petroleum Institute said US crude stocks fell by 816,000 barrels and gasoline stocks dropped by 1.1 million barrels last week.