Oil eases as weaker demand outlook counters Mideast supply concerns

Business Recorder reported that Brent futures fell 42 cents, or 0.47 per cent, to $88.56 a barrel by 0405 GMT on Thursday, while West Texas Intermediate dropped 55 cents to $82.72. The decline came after several sessions of gains, as traders shifted their focus from the stalled reopening of the Strait of Hormuz toward softer demand expectations. Talks between the United States and Iran remain deadlocked, and a senior Iranian source said no progress had been made on reviving the interim deal agreed in June.

Expectations of weaker consumption gained ground after an unexpected rise in US commercial crude inventories. Stockpiles grew by 17.4 million barrels in the week through August 7, the biggest weekly gain since January 2023, as exports fell, according to Energy Information Administration data. OPEC trimmed its projection for 2026 world oil demand growth to 580,000 barrels per day, while the International Energy Agency now expects consumption to contract by 1.6 million barrels per day this year, deeper than last month's 1 million barrel estimate. The agency attributed the weaker outlook to higher prices and restricted supply tied to the US-Israeli war with Iran.

ING analysts noted few fresh developments between the US and Iran, leaving both sides stuck in a stalemate. Haitong Futures said navigation safety in the region has worsened further, with vessels switching off their signals, which makes actual supply harder to gauge.