Oil prices fell by more than $1 a barrel on Thursday after leading energy agencies cut their forecasts for global oil demand, pointing to the economic impact of the ongoing US-Israeli war on Iran. However, concerns over supply disruptions in the Middle East prevented a sharper decline.
Brent crude futures slipped $1.29, or 1.5 cent, to $87.69 a barrel by 0100 GMT. US West Texas Intermediate crude also fell $1.30, or 1.6 percent, to $81.97.
The pressure on prices came after the Organisation of Petroleum Exporting Countries revised down its global oil demand growth forecast for 2026 to 580,000 barrels per day in its latest monthly report.
The International Energy Agency also painted a weaker picture, saying it now expects global oil consumption to shrink by 1.6 million barrels per day this year, compared with its previous estimate of a 1 million barrel decline. It said tighter fuel supplies and higher prices linked to the conflict had reduced demand.
Adding to the bearish mood, the US Energy Information Administration reported an unexpected jump in crude stockpiles. Commercial inventories rose by 17.4 million barrels to 424.4 million barrels in the week ended August 7, the largest weekly increase since January 2023. Analysts had expected a draw of around 1.4 million barrels.
Despite the weaker demand outlook, traders remained cautious because of continuing tensions in the Gulf. Talks between Iran and the United States aimed at ending the conflict remain stalled, with an Iranian official saying there had been no progress in efforts to revive an interim agreement reached in June.
Fresh attacks on ships passing through the Strait of Hormuz and the Bab el-Mandeb Strait have also raised concerns about the security of two of the world’s most important energy shipping routes.
Analysts at Haitong Futures said the worsening security situation had forced some vessels to switch off their tracking signals, making it harder for markets to monitor oil flows and assess the true level of supply.
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