Oil Prices Plunge as Global Demand Forecasts Dampen Markets
Oil prices plummeted by more than 2% on Thursday as investors grew concerned over weaker global demand and a sharp build in US crude inventories. The decline comes after Opec lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day.
The price drop was partly attributed to the US Energy Information Administration's data showing a significant increase in US commercial crude oil inventories, with a gain of 17.4 million barrels to 424.4 million in the week ended Aug 7.
Additionally, supply disruptions in the Middle East and the Black Sea region continued to support oil prices, with competing claims over the Strait of Hormuz adding to market tightness. The strait is a critical waterway through which about 20% of global oil supply passes before the start of the Iran war.
US President Donald Trump claimed that the United States had 'total control' of the waterway, while Iran's Basij paramilitary unit head said that the Strait was 'under Iran's control and management'. The conflicting claims have driven up uncertainty in the market.