Oil prices slipped on Wednesday after both OPEC and the IEA cut their 2026 demand forecasts, while a stalled Iran ceasefire and fresh Middle East tanker attacks kept markets on edge. A sharp US crude inventory build added further pressure on prices.
Oil prices fell in volatile trading on Wednesday, having earlier traded $1 higher, after forecasters cut projections for 2026 global oil demand while attacks on Middle Eastern shipping continued and talks to end the Iran war hit an impasse. Brent futures dropped 49 cents, or 0.55%, to $88.42 a barrel by 1315 GMT. WTI crude, meanwhile, fell 25 cents, or 0.3%, to $82.95.
OPEC and IEA cut demand forecasts
The Organisation of Petroleum Exporting Countries lowered its 2026 world oil demand growth forecast to 580,000 barrels per day in its monthly report. The International Energy Agency, however, went further, slashing its own 2026 projections to expect a 1.6 million bpd contraction this year. Yet the Paris-based agency also predicts a 4.3 million bpd drop in supply this year, leaving an overall 2026 deficit of around 1.27 million bpd.
Iran impasse and Hormuz attacks
Prices had risen earlier after a senior Iranian source told Reuters there were no discussions between Iran and the US to extend their ceasefire, because from Tehran's perspective the deal had no start date. The US and Yemen's Iran-aligned Houthis then reported separate attacks on shipping in the Strait of Hormuz and the Bab el-Mandeb Strait on Tuesday, two crucial export routes for Middle Eastern oil and gas alongside the Suez Canal. As a result, vessel traffic through Hormuz fell to a one-week low of eight ships on Tuesday, down from the 125 to 140 vessels that transited the strait daily before the war.
US crude stockpiles jump
Adding to the pressure, US crude inventories had already risen sharply last week according to preliminary API data — a build that, once confirmed, could ease supply-tightness concerns, Haitong Futures analysts said in a note. The EIA confirmed the build on Wednesday, reporting crude stocks climbed 17.4 million barrels for the week ending August 7, lifting commercial stockpiles to 424.4 million barrels, just 2% below the five-year average. Separately, weekly data tracked by Investinglive put the same crude build at 17.423 million barrels against a forecast for a 1.405-million-barrel draw, while another 6.1 million barrels left the Strategic Petroleum Reserve, which recently broke below 300 million barrels.
Gasoline and distillate stocks moved less: the EIA reported gasoline inventories fell 1.0 million barrels, while distillate stocks stayed 12% below their five-year average.
Sources: Reuters, Oilprice.com, Investinglive
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