Oil Falls Amid Weak Demand Expectations
Oil prices fell by more than a dollar on Thursday after analysts lowered their global oil demand forecasts for 2026 due to disruptions stemming from the US-Israeli war against Iran, although supply constraints resulting from the conflict kept prices at relatively high levels.
US West Texas Intermediate crude dropped $1.30, or 1.6 percent, to $81.97. The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth in 2026 to 580,000 barrels per day in its monthly oil market report released on Wednesday.
On the same day, the International Energy Agency said it expects consumption to contract by 1.6 million barrels per day this year, due to fuel supply constraints and higher prices caused by the US-Israeli war on Iran, which has led to a decline in demand.
Oil prices also came under pressure due to a sudden increase in US commercial crude oil inventories, which recorded the largest weekly increase since January 2023 last week amid falling exports, according to the US Energy Information Administration (EIA) on Wednesday. The EIA stated that crude oil inventories rose by 17.4 million barrels to 424.4 million barrels in the week ending August 7, the highest level since June 5, compared with analysts’ expectations in a Reuters survey for a decline of 1.4 million barrels.
A senior Iranian source said on Wednesday that no progress had been made in talks aimed at reviving the temporary agreement reached in June and establishing a timeline for its implementation.
Attacks targeting shipping traffic through the Strait of Hormuz and the Bab al-Mandab on Tuesday, two major routes for oil and gas exports from the Middle East, underscore the scale of risks that continue to threaten crude oil supplies in the region.
Analysts at Haitong Futures wrote in a note that “security conditions for navigation in these waters have deteriorated further, forcing ships to turn off their transponders, which reduces transparency in maritime shipping and makes it difficult for the market to track and assess actual supply levels.”
