Oil Prices Plummet on Weak Demand and Rising US Crude Inventories
Oil prices plummeted by over 2% on Thursday as investors grew cautious about weak global demand and a significant increase in US crude inventories. The Brent futures contract settled at $87.07 per barrel, down $1.91 or 2.15%, while the West Texas Intermediate (WTI) crude closed at $81.25 per barrel, down $2.02 or 2.4%. This reversal comes after a week of gains for oil prices.
The sharp decline was attributed to reports that Yemen's Houthis had targeted a Saudi Aramco refinery with drones, raising concerns about supply disruptions in the already tight global market. However, prices pared losses as investors weighed data from the US Energy Information Administration showing a large increase in US commercial crude oil inventories.
According to the EIA, US crude inventories rose by 17.4 million barrels to 424.4 million in the week ended August 7, their highest since June 5. This marked the largest weekly gain since January 2023, as exports slumped. The data suggests a potential shift in global demand for oil.