AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)
Markets

Oil holds above $70 despite weaker demand forecasts

  • Brent crude was down 14 cents, or 0.2%, at $71.17 a barrel
  • US crude lost 18 cents, or 0.2%, to $68.91
Published August 13, 2021

LONDON: The Brent benchmark oil price held above $70 a barrel despite heading for a second successive daily decline on Friday after the International Energy Agency warned that oil demand growth is slowing sharply owing to the spread of coronavirus variants.

Brent crude was down 14 cents, or 0.2%, at $71.17 a barrel by 1158 GMT. US crude lost 18 cents, or 0.2%, to $68.91. Over the week the benchmarks are up less than 1%.

Growth in demand for crude oil ground to a halt in July and is set to rise at a slower pace over the rest of 2021 because of surging infections from the Delta variant of the coronavirus, the International Energy Agency (IEA) said on Thursday.

"The sudden about-face by the IEA has shaken nerves and capped the oil rally, bringing home the reality of the impact of the Delta variant," said Jeffrey Halley, OANDA's senior market analyst for Asia Pacific.

Oil prices steady after US call for more oil raises supply concerns

Banks have also lowered their near-term demand forecasts. "We now see the global demand recovery stalling this month with oil demand only reaching 98.3 million barrels per day (bpd) in August and averaging 97.9 million bpd in September, on par with the nearly 98 million bpd average in July," JPM Commodities Research said.

Similarly, Goldman Sachs has reduced its estimate for the global oil deficit to 1 million bpd from 2.3 million bpd in the short term, citing an expected decline in demand in August and September.

Looking beyond the near-term risks from the Delta variant, the bank expects the demand recovery to continue alongside rising vaccination rates.

In sharp contrast, the Organization of the Petroleum Exporting Countries (OPEC) on Thursday stuck to its forecasts for a rebound in global oil demand this year and further growth in 2022, notwithstanding the rising concern over surges in COVID-19 infections.

However, OPEC also raised its expectations for supplies next year from other producers, including US shale drillers, which could snarl efforts by the producer group and allies to achieve a balanced market.

"The IEA/OPEC duo are far from being unanimous when it comes to the oil demand front. However, one area in which they find common ground is the reducing demand for OPEC crude," PVM analysts said in a note.

Comments

Comments are closed.