Oil Price Fundamental Daily Forecast – Marginally Lower as Investors Assess IEA, OPEC Demand Outlooks

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures settled marginally lower on Friday as traders assessed reports from the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC), which gave conflicting appraisals of the future demand situation.

On Friday, October WTI crude oil futures settled at $68.21, down $0.69 or -1.00% and October Brent crude oil futures finished at $70.59, down $0.72 or -1.02%.

Meanwhile, crude oil remained supported by improved demand in the world’s top consumer, the United States and other nations where the COVID-19 vaccination rate is higher. Traders were also saying that OPEC and its allies could adjust production levels in September to meet lower demand.

IEA Says COVID-19 Delta Variant Weighing on Demand; OPEC Sticks with Forecast

Rising demand for oil abruptly reversed course in July and is set to proceed more slowly for the rest of the year due to the spread of the COVID-19 Delta variant, the International Energy Agency (EIA) said on Thursday.

“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 Paris-based IEA said.

“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,” it said in its monthly oil report.

Meanwhile, OPEC struck to its forecast for a rebound in global oil demand this year and further growth in 2022, notwithstanding the rising concern over surges in COVID-19.

US Drillers Add Most Oil Rigs in a Week Since April – Baker Hughes

U.S. Energy firms added the most oil rigs in a week since April as the total rig count more than doubled from a record low a year ago amid a recovery in crude prices.

The combined oil and gas rig count, an early indicator of future output, was up for the second week in a row, increasing nine to 500 in the week to August 13, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.

U.S. oil rigs rose 10 to 397 this week, also their highest since April 2020, and up from 172 a year ago, which was their lowest since 2005 before the shale boom boosted activity.