Oil Prices Decline Amid Weaker Demand Outlook and Higher US Stocks
Oil prices declined on Thursday as investors assessed weaker global demand prospects and higher US crude stocks. Brent futures fell $2.20, or 2.47%, to $86.78 a barrel by 1324 GMT, trimming gains accumulated over the previous six sessions.
The large crude stocks build in the U.S. last week is a headwind for prices, said UBS analyst Giovanni Staunovo, adding that the downside should be limited as long as flows through the Strait of Hormuz remain depressed.
US commercial crude oil inventories made their largest weekly gain since January 2023 as exports slumped, data from the Energy Information Administration showed on Wednesday. Crude inventories rose by 17.4 million barrels to 424.4 million in the week ended August 7, their highest since June 5.
The IEA said it expected a contraction of 1.6 million bpd in consumption this year, versus a forecast of 1 million bpd last month, with demand curtailed by higher prices and restricted supply due to the US-Israeli war with Iran.