Oil stable as the delta variant weighs on recovery in demand

Oil prices remained stable on Thursday as the delta variant of the coronavirus continues to weigh on demand prospects, offsetting a decline in U.S. production in the Gulf of Mexico due to the damage caused by Hurricane Ida. Brent crude rose 4 cents 0901 GMT to $ 72.64 a barrel, while West Texas Intermediate (WTI) crude fell 11 cents, or 0.16%, to $ 72.64. About 77% of US golf production remained offline as of Tuesday, which equates to about 1.4 million barrels per day (bpd). The market has lost around 17.5 million barrels of oil so far. The offshore drilling in the Gulf accounts for about 17% of US production. The U.S. Energy Information Agency (EIA) said Wednesday that U.S. crude oil production is projected to decline 200,000 barrels per day to 11.08 million barrels per day in 2021, noting that Hurricane Ida will be a stronger one Lower than the previous forecast of 160,000 barrels per day. However, prices came under pressure as the US Energy Agency lowered its forecast for global oil demand growth in 2021 on Wednesday and barely changed its estimate for 2022. "The latest wave of the coronavirus, the spread of the Delta variant, has made investors cautious and pragmatic over the past month," said Tamas Varga, an oil analyst at London-based brokerage firm PVM Oil Associates. "That pessimism is reflected in the latest short-term energy outlook released by the EIA yesterday afternoon." Sentiment was also depressed by the US Federal Reserve, which lowered its forecast for this year's GDP growth in the US due to the resurgence of COVID-19. American Petroleum Institute (API) data showed that the decline in crude oil inventories for the week ended September 3 was less than expected in a Reuters poll, but the decline in gasoline and distillate inventories was greater than expected.