Key Moments
- Brent and WTI futures moved lower as traders weighed weaker demand projections and a sharp rise in U.S. crude stocks.
- U.S. commercial crude inventories increased by 17.4 million barrels to 424.4 million, contrasting with expectations for a draw.
- Geopolitical tensions and supply disruptions in the Middle East and Black Sea continued to lend some support to prices.
Prices Ease After Multi-Session Rally
Oil benchmarks fell on Thursday as market participants evaluated a softer global de
mand outlook alongside a jump in U.S. crude inventories, even as ongoing supply disruptions and tensions around the Strait of Hormuz limited the downside.
Brent crude futures declined 91 cents, or 1%, to $88.07 per barrel at 0800 GMT, paring gains accumulated over the previous six trading sessions.
U.S. West Texas Intermediate (WTI) futures dropped 96 cents, or 1.2%, to $82.31 per barrel, after rising in each of the last five sessions.
Inventory Shock and Demand Revisions Pressure Prices
According to PVM analyst John Evans, the build-up in U.S. crude inventories, together with reduced demand projections from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA), has helped cap prices below $90 per barrel.
Data from the U.S. Energy Information Administration (EIA) released on Wednesday showed that commercial crude stocks posted their largest weekly increase since January 2023, driven by weaker exports.
| Indicator | Latest Reading | Comparison/Expectation |
|---|---|---|
| U.S. commercial crude inventories (weekly change) | +17.4 million barrels | Largest weekly gain since January 2023 |
| Total U.S. commercial crude inventories | 424.4 million barrels | Highest since June 5 |
| Reuters poll expectation for crude stocks | 1.4 million-barrel draw | Actual result was a large build instead of a draw |
The EIA reported that crude inventories climbed by 17.4 million barrels to 424.4 million barrels in the week ended August 7, reaching their highest level since June 5. This outcome contrasted sharply with a Reuters poll that had anticipated a draw of 1.4 million barrels.
On the demand side, OPEC reduced its projection for global oil demand growth in 2026 to 580,000 barrels per day in its latest monthly oil market report released on the same day.
The IEA also turned more pessimistic, stating that it now expects oil consumption to contract by 1.6 million barrels per day this year, compared with a decline of 1 million barrels per day forecast a month earlier. The agency attributed the weaker outlook to the impact of higher prices and supply constraints linked to the U.S.-Israeli war with Iran.
Geopolitical Risks and Supply Disruptions Provide a Floor
Despite the bearish demand and inventory signals, ongoing supply disruptions and heightened geopolitical risk in key producing and transit regions continued to lend support to crude prices.
In the Middle East, efforts to resolve issues around the blockaded Strait of Hormuz remained stalled. On Wednesday, a senior Iranian source said there had been no progress in talks to revive an interim U.S.-Iranian deal agreed in June and define a timeframe to implement it.
Shipping flows through the Strait were affected, with vessel movements excluding container ships falling to five crossings on Wednesday, their lowest level in three weeks, according to shipping data from Kpler.
Conflict-Related Incidents in Black Sea Region
Elsewhere, Russia carried out strikes on Ukraine’s Izmail port area in the southern Odesa region overnight, while a drone attack ignited a fire in an industrial zone in Salavat in Russia’s republic of Bashkortostan, which hosts a major oil refinery.
These incidents added to the broader backdrop of supply risk in the Black Sea area and surrounding regions, underpinning crude prices even as demand expectations softened.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
