Oil prices moved lower on Thursday as investors weighed a softer global demand outlook and a sharp increase in U.S. crude inventories against continuing supply risks linked to the Strait of Hormuz and disruptions elsewhere. Brent futures fell 91 cents, or 1%, to $88.07 a barrel at 0800 GMT, trimming gains accumulated over the previous six sessions. U.S. West Texas Intermediate (WTI) crude declined 96 cents, or 1.2%, to $82.31 a barrel after rising for five consecutive sessions.
Rising U.S. crude stocks pressure prices
A sizeable increase in U.S. inventories helped keep crude below the $90-a-barrel mark, while lower demand projections from both the Organization of the Petroleum Exporting Countries and the International Energy Agency added further pressure.
PVM analyst John Evans said the combination of growing U.S. inventories and weaker demand estimates was limiting the market’s upside.
Data released by the Energy Information Administration on Wednesday showed that U.S. commercial crude inventories recorded their largest weekly increase since January 2023 as exports fell sharply.
Stocks climbed by 17.4 million barrels to 424.4 million in the week ended August 7, reaching their highest level since June 5. That contrasted sharply with a Reuters poll that had forecast a decline of 1.4 million barrels.
OPEC and IEA cut oil demand expectations
The outlook for consumption also became less supportive for crude markets after major energy organisations revised their forecasts lower.
OPEC reduced its estimate for global oil demand growth in 2026 to 580,000 barrels per day in its latest monthly oil market report.
The IEA, meanwhile, said it now expects oil consumption to contract by 1.6 million barrels per day this year, compared with a projected decline of 1 million barrels per day previously.
According to the agency, elevated prices and restricted supply linked to the U.S.-Israeli war with Iran are weighing on demand.
Strait of Hormuz tensions support the market
Despite the weaker demand backdrop, supply risks in the Middle East continued to provide some support to crude prices.
A senior Iranian source said on Wednesday that there had been no progress in talks aimed at reviving an interim U.S.-Iran agreement reached in June or at establishing a timetable for its implementation.
Shipping activity through the Strait of Hormuz also remained subdued. Excluding container vessels, crossings fell to five on Wednesday, the lowest level in three weeks, according to Kpler shipping data.
The lack of progress towards reopening the key energy route has kept concerns over supply disruptions firmly in focus.
Black Sea disruptions add to supply concerns
Oil markets are also monitoring developments around Russia and Ukraine as attacks threaten energy and transport infrastructure.
Russia struck the Izmail port area in Ukraine’s southern Odesa region overnight, while a separate drone attack caused a fire in an industrial zone in Salavat, located in Russia’s Bashkortostan republic.
Salavat is home to a major oil refinery, adding another source of uncertainty for energy markets already dealing with restricted Middle Eastern supply flows.
The combination of weaker consumption expectations and rising U.S. inventories is currently weighing on oil, although continuing geopolitical disruptions are limiting the scale of the decline.