Oil prices eased during Thursday’s Asian session as expectations of weaker global demand this year offset concerns over Middle East supply disruptions, with no reported progress towards reopening the Strait of Hormuz.
By 3:10 pm AEST (5:10 am GMT), Brent futures had fallen 22 cents, or 0.3%, to $88.75 a barrel, while U.S. West Texas Intermediate (WTI) crude declined 33 cents, or 0.4%, to $82.90.
A senior Iranian source told Reuters on Wednesday that there had been no progress in talks to revive an interim deal agreed in June and establish a timeframe for its implementation.
ING commodities strategists noted in The Commodities Feed: "There was little in the way of fresh developments between the U.S. and Iran, with both sides remaining in a deadlock.
"Meanwhile, the latest large drone attack on Russia’s Novorossiysk port appears to have spared oil infrastructure, with no reports of damage to oil terminals as of now."
With no change in prospects for reopening the Strait of Hormuz, attention shifted to the demand outlook after a surprise increase in U.S. crude inventories and lower consumption forecasts from OPEC and the International Energy Agency.
U.S. commercial crude inventories recorded their largest weekly increase since January 2023 as exports fell, according to data from the Energy Information Administration (EIA) on Wednesday (Thursday AEST).
Crude inventories rose by 17.4 million barrels to 424.4 million barrels in the week ended 7 August, their highest level since 5 June. Analysts had expected a draw of 1.4 million barrels.
The Organization of the Petroleum Exporting Countries also lowered its forecast for global oil demand growth in 2026 to 580,000 barrels per day in its monthly oil market report.
Meanwhile, the International Energy Agency expects global oil consumption to contract by 1.6 million barrels per day this year, compared with its previous forecast of a 1 million bpd decline.
The agency said higher prices and restricted supply linked to the U.S.-Israeli war with Iran would weigh on demand.
