Oil drops below $70 as U.S. urges OPEC+ to pump more

OIL PRICE - LONDON. Oil fell below $70 a barrel on Wednesday as the United States urged OPEC and its oil-producing partners to boost output, saying current production was not enough and could threaten the global economic recovery.

The price of Brent crude is up 35% this year supported by OPEC-led supply curbs, even after oil last week suffered the steepest weekly loss in months on worries that travel restrictions to curb coronavirus infections would hit demand.

The White House said in a statement on Wednesday that the Biden administration had urged OPEC and its partners to boost production. CNBC had earlier reported the development.

"At a critical moment in the global recovery, this is simply not enough," Biden's national security adviser Jake Sullivan said in the statement, referring to recently-agreed output boosts by OPEC and its allies.

Brent crude was down 77 cents, or 1.1%, to $69.86 a barrel at 1345 GMT, following a 2.3% rally on Tuesday. U.S. West Texas Intermediate (WTI) was down 74 cents, or 1.1%, to $67.55, after a 2.7% jump on Tuesday.

The Organization of the Petroleum Exporting Countries and others, known as OPEC+, at a meeting in July agreed to boost output by 400,000 barrels a day a month starting in August until the rest of their output cuts are phased out.

The producers have been gradually easing a record cut of 10 million bpd, about 10% of world demand, made in 2020 as oil use recovers from the pandemic-induced slump.

Earlier on Wednesday, crude was trading above $70 as signs of rising fuel demand in the United States offset concerns about travel curbs in Asia caused by the COVID-19 Delta variant.

Industry data showed U.S. crude and gasoline inventories fell last week, while the U.S. Energy Information Administration (EIA) said U.S. job growth and increasing mobility had boosted gasoline consumption so far this year.

In focus later will be the EIA's official U.S. inventory figures at 1430 GMT.

On Tuesday, industry group the American Petroleum Institute said U.S. crude stocks fell by 816,000 barrels and gasoline stocks dropped by 1.1 million barrels last week.