Oil Prices Plummet on Lower Demand Forecasts and Surging US Inventories

Oil prices plummeted over $1 on Thursday as forecasters lowered global oil demand projections for 2026 due to disruptions from the US-Israeli war on Iran, despite a deadlocked talks between Iran and the US.

The Organisation of Petroleum Exporting Countries (OPEC) reduced its world oil demand growth forecast for 2026 to 580,000 barrels per day in its monthly oil market report on Wednesday. The International Energy Agency also cut its consumption forecast by 1.6 million bpd this year, down from a previous estimate of 1 million bpd.

The price drop was exacerbated by a surprise build in US commercial crude oil inventories, which rose by 17.4 million barrels to 424.4 million barrels in the week ended August 7, their highest since June 5.