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US Oil Update: Crude Dips Amid Inventory Build, Weak Demand Forecasts

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Crude oil prices declined more than 2% on Thursday pressured by an increase in US crude stockpiles and gloomy demand outlooks from OPEC and the IEA.

The Brent crude futures contract dipped 2.5% to $86.74 per barrel, while West Texas Intermediate crude futures declined 2.7% to $81/bbl.

"Oil prices did come under pressure after the US Energy Information Administration reported that US crude oil inventories rose by 17.4 mbbl last week," ANZ analysts noted.

US commercial crude oil inventories increased by 17.4 million barrels to 424.4 mmbbls in the week ended Aug. 7, the Energy Information Administration said in its weekly report on Wednesday.

"This was nearly double the amount estimated by the industry group API earlier this week. This was the biggest weekly move in inventories since January 2023. The build was concentrated on the US Gulf Coast, due to softening export demand and a surge in imports," ANZ added.

Weighing on sentiment, OPEC lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day in its monthly report.

The International Energy Agency projected a consumption contraction of 1.6 million bpd this year as elevated prices and supply restrictions tied to the US-Israeli conflict with Iran weigh heavily on consumption.

ING analysts noted that prices eased despite a lack of breakthroughs in US-Iran discussions.

US President Donald Trump asserted on Truth Social that the US maintains "total control" over the Strait of Hormuz through a naval blockade described as a "wall of steel."

On the physical supply front, disruptions extended beyond the Middle East.

An oil refinery in the Russian city of Orsk was forced to shut down following a Ukrainian drone strike on Tuesday, with regional governor Evgeny Solntsev stating via the Telegram messaging app that repairs will take up to six months.

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