Oil Prices Plummet on Weak Demand Outlook and Large Inventory Build
Oil prices took a hit on Thursday, settling down circa 2% as investors focused on weaker global demand and a sizeable build in US crude inventories. The pullback marked a clean break from a six-session rally that had carried both benchmarks higher into Wednesday.
The bigger driver was inventory data, with the US Energy Information Administration reporting that commercial crude stocks posted their largest weekly gain since January 2023, rising by around 17 million barrels to around 424 million. This is the highest level since early June, as exports slumped.
Additionally, both OPEC and the International Energy Agency cut their demand growth forecasts for 2026. OPEC trimmed its estimate to around 580,000 bpd, while the IEA projected a contraction of roughly 1.6 million bpd in consumption this year, wider than its previous forecast.
Despite the supply concerns, diesel cracks pushed to a record high alongside falling crude prices, indicating a market that is increasingly differentiating between crude oversupply and product side tightness.