Oil drops on lower demand forecasts despite deadlock in US-Iran talks
XLE•Oil falls as demand forecasts are cut
BEIJING, Aug 13 (Reuters) - Oil prices fell more than $1 on Thursday as forecasters lowered global oil demand projections for 2026 because of the disruptions from the U.S.-Israeli war on Iran, though the supply constraints from the conflict provided a floor for the market.
Brent futures LCOc1 dropped $1.29, or 1.5%, at $87.69 a barrel by 0100 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 fell $1.30, or 1.6%, to $81.97.
The Organisation of Petroleum Exporting Countries lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day in its monthly oil market report on Wednesday.
On the same day, the International Energy Agency said it expects a 1.6 million bpd contraction in consumption this year, down from a forecast of 1 million bpd last month, because of restricted fuel supplies and higher prices from the U.S.-Israeli war on Iran that have curtailed demand.
U.S. inventories and export slump add pressure
Oil prices were also under pressure from a surprise build in U.S. commercial crude oil inventories, which posted their largest weekly gain since January 2023 last week as exports slumped, the Energy Information Administration said on Wednesday.
Crude inventories rose by 17.4 million barrels to 424.4 million barrels in the week ended August 7, their highest since June 5, the EIA said, compared with analysts' expectations in a Reuters poll for a 1.4 million-barrel draw.
Iran talks and shipping risks keep a floor under prices
Still, the deadlocked talks between Iran and the U.S. to end the war in the Gulf have kept prices elevated.
A senior Iranian source said on Wednesday that there had been no progress in talks to revive the interim deal agreed in June and define a time frame to implement it.
