Oil prices fell by more than a dollar on Thursday after forecasters cut their projections for global oil demand in 2026, citing the disruption caused by the US-Israeli war on Iran.
Brent futures were down $1.29, or 1.5 percent, at $87.69 a barrel by 0100 GMT. US West Texas Intermediate crude fell $1.30, or 1.6 percent, to $81.97.
The declines reverse part of Wednesday’s advance, when both benchmarks climbed on geopolitical tension ahead of US inflation data.
Demand forecasts revised down
The Organisation of Petroleum Exporting Countries lowered its forecast for world oil demand growth in 2026 to 580,000 barrels per day in its monthly report on Wednesday.
The International Energy Agency went further the same day, saying it now expects consumption to contract by 1.6 million barrels per day this year — a sharper fall than the 1 million bpd contraction it projected a month ago. The agency attributed the revision to restricted fuel supplies and higher prices stemming from the war.
Prices were also weighed down by an unexpected build in US commercial crude inventories. Stockpiles rose by 17.4 million barrels to 424.4 million in the week ended August 7, the largest weekly gain since January 2023 and the highest level since June 5, according to the Energy Information Administration. Analysts polled by Reuters had expected a draw of 1.4 million barrels.
Supply risks keep a floor under prices
Deadlocked talks between Iran and the United States continue to support the market. A senior Iranian source said on Wednesday there had been no progress toward reviving the interim deal agreed in June or setting a timetable to implement it.
Attacks on shipping in the Strait of Hormuz and the Bab el-Mandeb on Tuesday underlined the risk to regional supply. Analysts at Haitong Futures said conditions had deteriorated to the point that vessels were switching off their signals, reducing transparency and making actual supply levels harder for the market to assess.
Ada Derana carried the report citing Reuters.
