Oil Prices Fall as OPEC and IEA Slash 2026 Demand Outlooks

Despite the ongoing stalemate in the U.S.-Iran talks and persistent risks to shipping in the Middle East, oil prices fell in Asian trading on Thursday, weighed down by cuts to 2026 oil demand forecasts from both OPEC and the International Energy Agency. Brent Crude prices dropped by 0.5% to trade below $89 per barrel at $88.56, easing from the Wednesday intraday high of over $89 a barrel, amid demand concerns and a bearish EIA inventory report. The U.S. benchmark, WTI Crude, traded 0.60% lower at $82.77 in the Asian session. On Wednesday, both OPEC and the IEA slashed their oil demand forecasts for 2026 due to the ongoing closure of the Strait of Hormuz. The IEA expects in its August monthly report that oil demand will slump by 1.6 million barrels per day (bpd) this year, a 510,000 bpd decline from the expected figure in the July report. The renewed hostilities at the end of July and the deadlock in U.S.-Iran talks have prompted the IEA to project much larger demand destruction due to higher prices than were expected in early July. OPEC also cut its demand forecast for 2026 on Wednesday, reducing its outlook to 580,000 bpd growth, down from the 780,000 bpd growth expected in the July report. Additionally, a surprise big build in U.S. crude oil inventories, with a massive increase of 17.4 million barrels during the week ending August 7, weighed on oil prices. This increase brought commercial stockpiles to 424.4 million barrels, just 2% below the five-year average for this time of year. The large inventory increase was driven by a 1.14 million bpd increase in crude oil imports week-on-week, while crude exports fell by 627,000 bpd.