KEY POINTS
- Brent fell 1.9 percent to $87.32 and WTI 1.95 percent to $81.65 on Thursday.
- US crude stocks jumped 17.4 million barrels, their biggest weekly rise since January 2023, as OPEC and the IEA cut demand views.
- Supply risks, including depressed Hormuz traffic and stalled US-Iran talks, limited the decline.
Oil prices fell on Thursday as investors weighed a weaker global demand outlook and a sharp rise in US crude stocks, even as supply disruptions and a diplomatic deadlock cushioned the drop.
Brent crude fell $1.66, or 1.9 percent, to $87.32 a barrel by 0935 GMT, trimming gains from the previous six sessions. Meanwhile, US West Texas Intermediate dropped $1.62, or 1.95 percent, to $81.65 after five days of gains.
Stock build and softer demand weigh
According to the Energy Information Administration, US commercial crude inventories posted their largest weekly gain since January 2023 as exports slumped. Stocks rose 17.4 million barrels to 424.4 million in the week to August 7, against a Reuters poll that had expected a 1.4 million-barrel draw. Consequently, UBS analyst Giovanni Staunovo called the build a headwind, though he said the downside should stay limited while Hormuz flows remain depressed.
Furthermore, forecasters trimmed their demand views. OPEC cut its 2026 world oil demand growth forecast to 580,000 barrels per day, while the IEA now expects consumption to contract by 1.6 million barrels per day this year, up from 1 million a month ago, as high prices and the US-Israeli war with Iran curb use.
Supply risks limit the fall
Still, supply worries kept a floor under prices. A senior Iranian source said on Wednesday that talks to revive an interim US-Iranian deal, agreed in June, had made no progress, which left the timeframe for implementation unclear. Therefore, traders kept pricing in the risk around the blockaded Strait of Hormuz.
Moreover, shipping data from Kpler showed vessel crossings through Hormuz, excluding container ships, fell to five on Wednesday, their lowest in three weeks. In addition, conflict elsewhere added to the strain, as Russia struck Ukraine’s Izmail port area in Odesa overnight and a drone attack sparked a fire near a large refinery in Salavat, in Russia’s Bashkortostan region.
