Crude oil prices drifted lower on Thursday amid concerns about outlook for energy demand after a report from the International Energy Agency (IEA) said oil demand growth will likely slow down in the second half of the year.
West Texas Intermediate Crude oil futures for September ended down by $0.16 or about 0.2% at $69.09 a barrel.
The IEA said in its report that it sees a significant drop in global oil demand for the rest of this year due to imposition of new coronavirus restrictions in several major oil consumer countries, particularly in Asia.
“We now estimate that demand fell in July as the rapid spread of the COVID-19 Delta variant undermined deliveries in China, Indonesia and other parts of Asia,” the international energy watchdog said in its monthly report.
U.S. President Joe Biden’s administration call to OPEC and its allies to boost oil output to tackle rising gasoline prices, weighed as well on crude oil prices. The administration says it sees rising gasoline prices as a threat to the global economic recovery,
In July, OPEC agreed to boost output each month by 400,000 bpd versus the previous month, starting in August, until the rest of their record cuts of 10 million bpd, about 10% of world demand, made in 2020 are phased out.
“At a critical moment in the global recovery, this is simply not enough,” National security adviser Jake Sullivan said in a statement.
“Higher gasoline costs, if left unchecked, risk harming the ongoing global recovery,” he added. “OPEC+ must do more to support the recovery.”