Oil eased on Thursday as attention turned to weakening global demand, even with no progress on reopening the Strait of Hormuz (Geo News).
Brent futures slipped 42 cents, or 0.47 per cent, to $88.56 a barrel, trimming gains made over the previous six sessions. West Texas Intermediate fell 55 cents, or 0.66 per cent, to $82.72 after five sessions of advances.
Two forecasts drove the turn. OPEC lowered its world oil demand growth forecast for 2026 to 580,000 barrels a day in its monthly report on Wednesday. The International Energy Agency went further, saying it now expects consumption to contract by 1.6 million barrels a day this year, against a forecast of 1 million last month, because restricted supply and higher prices caused by the US-Israeli war on Iran have curtailed demand.
That is the mechanism worth understanding. The war has pushed prices up by constraining supply; the price itself is now destroying demand fast enough to push prices back down. High prices are doing the work a settlement would otherwise do.
Inventories reinforced it. US commercial crude stocks rose 17.4 million barrels to 424.4 million in the week ended August 7, their highest since June 5 and the largest weekly build since January 2023, as exports slumped. Analysts polled by Reuters had expected a draw of 1.4 million barrels.
The risks have not gone away. A senior Iranian source said on Wednesday there had been no progress in talks to revive the interim deal agreed in June or to set a timeframe for implementing it. Attacks on shipping in both the Strait of Hormuz and the Bab el-Mandeb on Tuesday — the latter killing three Pakistani crew aboard the food carrier Tihamah — underline the continuing threat to supply.
Analysts at Haitong Futures noted a further consequence: “The safety situation for navigation in these waters has further deteriorated, forcing vessels to turn off their signals, which reduces transparency in shipping and makes it more difficult for the market to track and assess actual supply levels.”
Ships going dark makes the supply picture itself less knowable — which is a form of risk that does not show up in any inventory report.
