Crude futures fell over 1% in after-hours trading on Thursday, pressured by a tepid global demand outlook and a larger-than-expected build in US crude inventories, though ongoing supply risks and regional maritime disruptions in the Middle East cushioned the selloff.
Brent crude futures slipped 1.1% to $88.10 per barrel, while Murban crude futures were down 0.23% to $89.87/bbl.
Gelber & Associates said that the selling has also been reinforced by weaker consumption forecasts, with both the Organization of the Petroleum Exporting Countries and the International Energy Agency cutting their demand outlooks as high prices weigh on fuel use.
On Wednesday, the IEA cut its outlook for oil demand, saying global consumption is now projected to decline by an average of 1.6 million barrels per day in 2026.
The agency said that global demand is forecast to decline by 510,000 b/d from its July estimate, as the ongoing closure of the Strait of Hormuz and elevated fuel prices continue to weigh on oil consumption.
The global oil market faces a shortfall of 1.8 million barrels a day this quarter, more than double an earlier projection as the US-Iran conflict drags on, the IEA said, while cautioning that crude demand was being eroded by higher prices.
Saxo Bank strategists said that both the IEA and the Energy Information Administration, in their latest monthly reports, raised their estimates of 2026 demand destruction, helping to explain why crude prices remain relatively muted despite six months of disrupted supply.
OPEC also slashed its global oil demand growth forecasts for the fourth straight month for 2026, projecting demand to grow by 600,000 barrels per day year-over-year.
The reduction is 200,000 b/d less than its July forecast of 800,000 b/d, already down from 1 million b/d in June, 1.2 mmbbl/d in May, and 1.4 mmbbl/d in April.
Fueling bearish sentiment, US commercial crude oil inventories rose by 17.4 million barrels to 424.4 mmbbls in the week ended Aug. 7, the EIA said in its weekly report on Wednesday. The larger-than-expected build is above Investing.com's estimate of a 1.7-mmbbl draw for the week.
Meanwhile, President Trump said on Wednesday that the US has "total control" of the Hormuz and expects to maintain control, as Pakistan, the mediator between the two countries, reportedly said the deadline for a memorandum of understanding between Washington and Tehran could be extended.
"The USA has total control over the Strait of Hormuz. I think we will keep it! Our naval blockade is being called, by everyone, 'a wall of steel,' and there is nothing Iran can do about it," Trump said in a Truth Social post.
Tensions around the Middle East energy chokepoints remain elevated, as Oman's coastline has reportedly begun to be affected by a massive oil spill from a leaking tanker that ran aground on June 30, carrying an estimated 800,000 barrels of Russian oil.
UK-based maritime risk and response firm Ambrey said it has been hired to salvage a grounded Russian shadow fleet tanker off Oman's coast and to stop an oil spill that threatens wildlife.