(LONDON, UK) – Oil prices fell on Thursday after gains in previous sessions. Attention shifted to expectations of weaker global demand this year, while no progress was made on reopening the Strait of Hormuz.
Brent crude futures fell by 42 cents, or 0.47 percent, to $88.56 per barrel by 04:05 GMT. That is equal to £69.61 per barrel at current exchange rates. US West Texas Intermediate crude fell by 55 cents, or 0.66 percent, to $82.72 per barrel, equal to £65.02. The US benchmark had risen during the previous five sessions.
A senior Iranian source said on Wednesday that no progress had been made in talks on restoring the temporary agreement reached in June or on setting a timeline for its implementation.
“There have been practically no new developments in US Iran relations, and both sides remain at an impasse,” ING analysts said in a report.
The analysts added that oil infrastructure at the Russian port of Novorossiysk remained undamaged during the latest mass drone attack. There were no reports of damage to oil terminals.
With no change in the prospects for reopening the Strait of Hormuz, which had been the main factor driving prices higher over the past week, attention turned to demand forecasts. That followed an unexpected rise in US oil inventories and lower consumption forecasts from OPEC and the International Energy Agency.
Data from the US Energy Information Administration showed that commercial crude oil inventories in the United States recorded their largest weekly increase since January 2023. The rise came amid a sharp drop in exports.
In the week ending 7 August, crude oil inventories rose by 17.4 million barrels to 424.4 million barrels. That was the highest level since 5 June.
Analysts polled by Reuters had forecast a draw of 1.4 million barrels.
On the same day, OPEC lowered its forecast for global oil demand growth in 2026 to 580,000 barrels per day.
The International Energy Agency said it expects consumption to fall by 1.6 million barrels per day this year. That compared with a forecast of 1 million barrels per day published last month. Demand is being held back by higher prices and supply restrictions linked to the war between the US and Israel against Iran.
The stalled talks between Iran and the US on ending the war in the Persian Gulf are supporting prices at a certain minimum level.
“The security situation for shipping in these waters has worsened further, forcing vessels to switch off their signalling devices. That reduces shipping transparency and makes it harder for the market to track and assess actual supply volumes,” analysts at Haitong Futures said.
Iran’s parliamentary committee on national security and foreign policy has approved its own draft law on management of the strategic waterway, against the background of talks with Oman on shipping through the Strait of Hormuz.