Oil Prices Plummet on Slashed Demand Forecasts and Surging Inventories
Oil prices have plummeted as global demand forecasts for 2026 have been slashed by both OPEC and the International Energy Agency (IEA). Despite ongoing tensions in the Middle East, crude oil prices fell to $88.56 per barrel, down from a high of over $89 per barrel on Wednesday.
The IEA reduced its oil demand forecast for this year by 510,000 barrels per day (bpd), citing renewed hostilities at the Strait of Hormuz and higher oil prices due to U.S.-Iran talks stalemate. OPEC also cut its demand forecast, projecting a growth of 580,000 bpd in 2026, down from 780,000 bpd expected in July.
A surprise build-up in U.S. crude oil inventories further weighed on oil prices, with a massive increase of 17.4 million barrels during the week ending August 7. The rise brings commercial stockpiles to 424.4 million barrels, just 2% below the five-year average for this time of year.