WTI Holds Above $85 as Middle East Tensions Persist
WTI crude oil has held above $85 per barrel, continuing its recovery from the previous session's gain of 2.5%. The price support comes from ongoing Middle East tensions, including a stalled agreement between the US and Iran, new attacks on vessels in the Strait of Hormuz, and increased Houthi activity around the Red Sea.
The International Energy Agency (IEA) has downgraded its global demand forecast, expecting a 1.6 million barrel per day decline in 2026 due to high fuel prices and weak economic activity. However, observed inventories fell by 69 million barrels in July, leaving the market with a deficit of around 1.8 million barrels per day.
In the short term, traders are keeping an eye on Hormuz risks, which could push WTI above $88-90 if fresh data shows a draw in inventories. However, weaker demand forecasts and high US supply continue to cap fundamental upside.