Oil prices moved lower on Thursday, with both international and U.S. benchmarks sliding after a series of downward revisions to demand forecasts and an unexpected build in U.S. commercial crude inventories.
By 0100 GMT, Brent futures had fallen $1.29, or 1.5%, to $87.69 a barrel, while U.S. West Texas Intermediate (WTI) crude was down $1.30, or 1.6%, at $81.97.
Forecasters trimmed expectations for global oil demand growth in 2026. The Organisation of Petroleum Exporting Countries (OPEC) lowered its projection for world 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 (IEA) said it now expects consumption to contract by 1.6 million barrels per day this year, a revision downward from a forecast of a 1 million bpd contraction issued last month. The IEA attributed the larger expected decline to restricted fuel supplies and higher prices associated with the U.S.-Israeli war on Iran that have dampened demand.
Adding to downward pressure on prices, U.S. Energy Information Administration (EIA) data showed a surprise increase in commercial crude oil inventories. The EIA reported that U.S. crude stocks rose by 17.4 million barrels to 424.4 million barrels in the week ended August 7, the largest weekly gain since January 2023 and the highest level since June 5. That outcome contrasted with a Reuters poll of analysts that anticipated a 1.4 million-barrel draw.
Despite these demand-driven revisions and the inventory surprise, ongoing geopolitical tensions continued to provide a floor under oil markets. Talks between Iran and the United States to end the conflict in the Gulf have stalled; a senior Iranian source said on Wednesday there had been no progress to revive an interim deal agreed in June or to define a time frame for its implementation.
Meanwhile, attacks on shipping on Tuesday in two key Middle Eastern export corridors - the Strait of Hormuz and the Bab el-Mandeb Strait - underscored persistent supply risks. Haitong Futures analysts noted that the safety situation for navigation in these waters has deteriorated, with vessels turning off their signals. That practice, the analysts said, reduces transparency in shipping and complicates market assessment of actual supply levels.
Market participants are therefore navigating a landscape in which weaker demand prospects and a large U.S. inventory build weigh on prices, while conflict-related supply uncertainties limit the scope of declines.