Oil Prices Slip Below $88 as US Inventory Build and Weakening Demand Challenge Geopolitical Premium

Brent crude prices slipped below $88 per barrel on Thursday as a large US inventory build and weakening demand forecasts challenged its geopolitical premium.

The price drop comes after Brent briefly touched $90 earlier this week, when traders were less confident about an agreement between Washington and Tehran to restore normal traffic through the Strait of Hormuz.

Antonio Di Giacomo, senior market analyst at XS.com, said continued inventory accumulation alongside weaker fuel consumption could reduce the ability of geopolitical risks to push crude prices higher.

The International Energy Agency (IEA) expects global oil demand to contract by 1.6 million barrels per day in 2026, a steeper fall than its previous projection.