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Brent crude futures was down 12 cents, or 0.17%, at $71.32 a
barrel by 1056 GMT, after earlier rising to a session-high of
$71.90.
U.S. West Texas Intermediate (WTI) crude futures edged down 20
cents, or 0.29%, to $69.05.
The international energy watchdog said in its monthly report
that rising demand for oil reversed course in July and was set
to proceed more slowly for the rest of the year after the latest
wave of COVID-19 infections prompted countries to bring in
restrictions again.
"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."
The IEA put the demand slump last month at 120,000 barrels per
day (bpd) and predicted growth would be half a million bpd lower
in the second half of the year compared to its estimate last
month, noting some changes were due to revisions in data.
In its monthly report that also came out on Thursday, the
Organization of the Petroleum Exporting Countries (OPEC) stuck
to its prediction of a strong recovery in world oil demand in
2021 and 2022, despite concerns about the spread of the virus.
That came a day after the United States urged OPEC and its
allies, known as OPEC+, to boost oil output to tackle rising
gasoline prices, which it sees as a threat to the global
economic recovery.
OPEC agreed in July 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.
"The Biden Administration said that the recently agreed
production increases will not fully offset previous production
cuts imposed during the pandemic," ANZ said in a note.
(Additional reporting by Jessica Jaganathan; Editing by
Christian Schmollinger, Barbara Lewis and Pravin Char)
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