Oil Prices Plummet Amid Weaker Demand Forecasts and US Crude Build

Oil prices plummeted over 2% on Thursday, reversing a week-long rally as investors focused on signs of weaker global demand and a significant build-up in US crude inventories. Brent futures settled at $87.07 a barrel, down $1.91 or 2.15%, while WTI crude closed at $81.25 a barrel, down $2.02 or 2.4%. The decline came after reports that Yemen's Houthi rebels had targeted a Saudi Aramco refinery with drones, raising concerns about supply disruptions in an already tight market.

The US Energy Information Administration reported on Wednesday that commercial crude oil inventories rose by 17.4 million barrels to 424.4 million in the week ended August 7, their highest level since June 5. This gain was despite a slump in exports. The International Energy Agency also lowered its forecast for global oil demand growth in 2026 to 580,000 barrels per day.

News of the drone attacks on the Saudi refinery sent diesel cracks to an all-time high. The Jazan refinery has the capacity to produce 250,000 bpd of ultra-low sulfur diesel. Yemen's Houthi military source claimed the attack was in response to Saudi violations of Yemeni airspace and sovereignty.