LONDON: Global oil prices edged lower on Thursday as weaker demand forecasts and a sharp rise in US crude inventories outweighed persistent concerns over supply risks linked to tensions in the Middle East.
Brent crude futures fell 42 cents, or 0.47%, to $88.56 a barrel, while US West Texas Intermediate (WTI) crude declined 55 cents, or 0.66%, to $82.72 a barrel, reversing part of the gains recorded in previous trading sessions.
Why are oil prices falling despite Middle East tensions?
Oil markets came under pressure after both the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) lowered their 2026 global oil demand forecasts, citing weaker consumption prospects. Prices were also weighed down by a larger-than-expected increase in US commercial crude inventories.
According to the US Energy Information Administration (EIA), crude stockpiles rose by 17.4 million barrels to 424.4 million barrels in the week ending August 7, marking the largest weekly increase since January 2023.
What supply risks continue to support oil markets?
Despite weaker demand expectations, oil prices remain supported by ongoing geopolitical uncertainty in the Middle East. Iran said there had been no progress in efforts to revive an interim agreement with the United States, while attacks on commercial shipping in the Strait of Hormuz and the Bab el-Mandeb Strait have heightened concerns over potential disruptions to global energy supplies.
Analysts said the deteriorating security environment has complicated shipping operations and reduced market visibility over actual crude supply levels, keeping supply-related risks firmly in focus.