Geoffrey Smith 

Investing.com — Crude oil prices fell below $80 in early trade in the U.S. on Wednesday, after the Organization of Petroleum Exporting Countries shaved its forecasts for global oil consumption this year due to the summer wave of Delta-variant Covid-19.

OPEC’s forecast of demand for next year was unchanged. It expects that it will be 100.8 millions barrels per day. That’s an increase of some 4% from this year’s average and implies that world demand will have more or less returned to its pre-pandemic trajectory by the end of 2022.

By 9:15 AM ET (1315 GMT), futures were down 1.0% at $79.81 a barrel, the first time this week they’ve dipped below the $80 threshold. Futures declined 1.1% to $82.53/barrel

Markets are awaiting weekly inventory data from American Petroleum Institute. This is a little bit later than normal due to Columbus Day. A marginal increase of just over 100,000 barrels is expected from the government’s data, which are due on Thursday.

OPEC’s wasn’t all bearish by any means: it said that supply outside the bloc had been crimped for longer than expected and reduced its estimate of average 2021 supplies from non-OPEC countries by 210,000 barrels a day, chiefly because of the outages that followed Hurricane Ida.

Supply shortfalls outside the bloc increase the need for OPEC – which controls most of the world’s spare capacity – to raise output. OPEC estimated the ‘call’  on its production at 29.36 million barrels a day in the fourth quarter, more than 1 million b/d above what the bloc is scheduled to be producing even by the end of December under its plan for phased output increases.

Russian President stated that the $100/bbl price of oil is “quite possible” due to under-investment in the past, which was blamed on misguided western policy decisions.

His comments were an echo of a warning from the International Energy Agency earlier on Wednesday, which said in its annual World Energy Outlook that in fossil fuels to avoid a rerun of this year’s market disruptions. The IEA was much more concerned about failing to allocate enough funds to renewable energy in order to achieve the Paris Climate Accord’s goals.

Putin reiterated Russia’s willingness to provide more gas for Europe. He also urged Europe to renew long-term gas contracts with Gazprom. (MCX:). Putin pointed out with delight that European gas markets have been relying too heavily upon spot markets.