The rapidly-spreading coronavirus Delta variant and its impact on the global economy mean the world will consume less oil
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this year than previously thought, the International Energy Agency said Thursday.

In its closely-watched monthly market report, the Paris-based organization said that the worsening of the pandemic, as well as revisions to historical data, mean its global oil demand outlook has been “appreciably downgraded,” with some of this year’s forecast recovery shifted to 2022.

Investors have become concerned about falling commodities demand in China, where Beijing authorities last week canceled all large-scale exhibitions and events for the remainder of August. That, and other measures aimed at slowing the spread of the Delta variant, has in recent days spooked traders who were already worried about the fragile nature of China’s economic recovery.

The IEA cut its 2021 global oil demand growth forecast by 100,000 barrels a day, while upgrading its 2022 forecast by 200,000 barrels a day. The world’s thirst for oil is still expected to return to pre-pandemic highs in the second half of next year, the report said.

An expanded version of this report can be found at WSJ.com

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