Oil slips on weaker demand outlook and higher US stocks amid supply disruptions
- Brent futures were down 91 cents, or 1%, to $88.07 a barrel
Oil prices dropped due to revised lower global demand forecasts and a surprise build in US crude inventories, despite ongoing geopolitical tensions from the US-Israeli war on Iran.
- Lowered global oil demand growth forecasts by OPEC and IEA.
- Significant increase in US commercial crude oil inventories.
- Deadlocked US-Iran talks and Middle East shipping risks.
LONDON: Oil prices declined on Thursday as investors assessed prospects for weaker global demand this year and higher US crude stocks, while prices found support from a lack of progress in talks over the blockaded Strait of Hormuz and disruptions to supply.
Brent futures were down 91 cents, or 1%, to $88.07 a barrel at 0800 GMT, trimming gains over the prior six sessions.
US West Texas Intermediate (WTI) crude fell 96 cents, or 1.2%, to $82.31, after advancing over the past five sessions.
Crude inventory build in the US kept prices below $90 a barrel along with lower demand estimates by the Organization of the Petroleum Exporting Countries and the International Energy Agency, PVM analyst John Evans said.
US commercial crude oil inventories made their largest weekly gain since January 2023 as exports slumped, data from the Energy Information Administration showed on Wednesday.
Crude inventories rose by 17.4 million barrels to 424.4 million in the week ended August 7, their highest since June 5, the EIA said, versus Reuters poll expectations for a 1.4 million-barrel draw.
On the same day, OPEC lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day in its monthly oil market report.
The IEA said it expected a contraction of 1.6 million bpd in consumption this year, versus a forecast of 1 million bpd last month, with demand curtailed by higher prices and restricted supply due to the US-Israeli war with Iran.
Supply disruptions in the Middle East and the Black Sea continued to support oil prices.
Houthis say they don’t seek to close key Bab al-Mandeb Strait
On Wednesday a senior Iranian source said there had been no progress in talks to revive an interim US-Iranian deal agreed in June and define a timeframe to implement it.
Strait of Hormuz vessel crossings excluding container ships dropped to five on Wednesday, their lowest in three weeks, according to shipping data by Kpler.
Elsewhere, Russia struck Ukraine’s Izmail port area in the southern Odesa region overnight, while a drone attack triggered a fire in an industrial area in Salavat in the Russian republic of Bashkortostan, home to a large oil refinery.
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