By COMFORT OGBONNA
Oil prices edged lower on Thursday after rising for several sessions, as investors shifted their attention toward weakening global demand forecasts and a sharp increase in U.S. crude inventories. Prices remained supported, however, by the continued uncertainty surrounding the Strait of Hormuz and the lack of progress in efforts to ease tensions between the United States and Iran.
Brent crude futures fell 42 cents, or 0.47%, to $88.56 a barrel by 0405 GMT, while U.S. West Texas Intermediate crude declined 55 cents, or 0.66%, to $82.72 a barrel.
The declines followed gains in the previous sessions, with Brent having advanced for six consecutive sessions and WTI rising for five.
The market remained focused on the unresolved situation in the Gulf after an Iranian official said Wednesday that there had been no progress in efforts to revive an interim agreement reached in June. The talks are also intended to establish a timetable for implementing the agreement and easing the broader conflict.
Analysts said the lack of progress between Washington and Tehran has left the market with little new information about when, or whether, conditions around the Strait of Hormuz could improve.
“There was little in the way of fresh developments between the U.S. and Iran, with both sides remaining in a deadlock,” analysts at ING said in a market note.
The Strait of Hormuz remains a major factor in oil markets because of its importance to global energy shipments. Any prolonged disruption to shipping through the waterway could restrict supplies and increase prices.
Market concerns were also eased somewhat by reports that a major drone attack on Russia’s Novorossiysk port did not appear to damage oil infrastructure. There were no immediate reports of damage to oil terminals, limiting fears of another disruption to global crude supplies.
With no clear progress toward reopening or normalizing shipping through the Strait of Hormuz, investors turned increasingly toward signs of weakening demand.
The shift followed a sharp and unexpected increase in U.S. crude inventories. Data from the U.S. Energy Information Administration showed that commercial crude stocks increased by 17.4 million barrels during the week ended Aug. 7, reaching 424.4 million barrels.
It was the largest weekly increase in U.S. crude inventories since January 2023 and pushed stockpiles to their highest level since June 5.
The increase was particularly significant because analysts had expected U.S. crude inventories to decline by about 1.4 million barrels. A decline would normally indicate stronger demand or tighter supplies, while the large build pointed in the opposite direction.
Exports also weakened during the period, contributing to the rise in inventories.
The broader demand outlook has also deteriorated. The Organization of the Petroleum Exporting Countries lowered its forecast for global oil demand growth in 2026 to 580,000 barrels per day in its latest monthly assessment.
The International Energy Agency also reduced its expectations, forecasting that global oil consumption will contract by 1.6 million barrels per day this year. That compares with its previous forecast of a 1 million-barrel-per-day decline.
The agency attributed the weaker outlook partly to higher oil prices and supply disruptions linked to the conflict involving Iran.
The competing forces have left oil prices caught between concerns about reduced consumption and fears of tighter supplies.
On one side, higher inventories, weaker consumption forecasts and concerns about global economic activity are weighing on prices. On the other, uncertainty around the Strait of Hormuz and the unresolved conflict in the Gulf is preventing a sharper decline.
Shipping conditions in the region have also become increasingly difficult to assess.
Analysts at Haitong Futures said the security situation for vessels operating in the affected waters had deteriorated, with some ships turning off tracking signals because of safety concerns.
The reduction in shipping visibility makes it harder for traders and governments to determine the amount of oil moving through the region and assess the potential impact on global supplies.
The combination of geopolitical risk and weaker demand expectations is likely to keep oil markets volatile in the near term.
Investors will continue watching developments between the United States and Iran, shipping activity around the Strait of Hormuz, U.S. inventory data and further revisions to global oil-demand forecasts.
For now, the absence of progress toward reopening the key shipping route continues to provide support for prices, while growing evidence of weaker demand is limiting further gains.
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