Oil Prices Fall as Demand Forecasts Weaken Despite Supply Risks

Oil prices slipped on Thursday as traders weighed weaker global demand forecasts and a sharp increase in U.S. crude inventories against ongoing supply disruptions in the Middle East and Black Sea.

Brent crude futures fell $1.66, or 1.9%, to $87.32 a barrel, while WTI crude dropped $1.62, or 1.95%, to $81.65 at 0935 GMT. Both benchmarks were pulling back after gains over the previous six sessions.

The main bearish signal came from U.S. inventory data. The Energy Information Administration reported that commercial crude stocks jumped 17.4 million barrels to 424.4 million barrels in the week ended August 7, marking the largest weekly increase since January 2023. The result was far above the market expectation of a 1.4 million-barrel draw.

Demand expectations have also weakened. OPEC lowered its 2026 global oil demand growth forecast to 580,000 barrels per day, while the IEA expects consumption to contract by 1.6 million bpd, compared with its previous forecast for a 1 million bpd decline.

However, supply risks are limiting the downside. Vessel crossings through the Strait of Hormuz excluding container ships fell to five on Wednesday, according to Kpler, while there was still no progress reported in U.S.-Iran talks.

For Southeast Asian traders, the key balance is between weaker demand and tighter physical supply. Further inventory builds could pressure crude, while prolonged disruptions around major shipping routes could quickly revive the risk premium. Brent’s ability to hold above the mid-$80s will remain an important market signal.