Oil falls on weaker demand outlook and higher US stocks
XLE•Inventory build pressures prices
The large crude oil build in the U.S. last week is a headwind for prices, said UBS analyst Giovanni Staunovo, adding that the downside should be limited as long as flows through the Strait of Hormuz remain depressed.
U.S. commercial crude oil inventories made their largest weekly gain since January 2023 as exports slumped, data from the Energy Information Administration showed on Wednesday.
Crude inventories rose by 17.4 million barrels to 424.4 million in the week ended August 7, their highest since June 5, the EIA said. A Reuters poll of analysts had predicted a draw of 1.4 million barrels.
Demand forecasts cut by OPEC and IEA
Meanwhile, OPEC lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day in its monthly oil market report.
The IEA said it expected a contraction of 1.6 million bpd in consumption this year, versus a forecast of 1 million bpd last month, with demand curtailed by higher prices and restricted supply due to the U.S.-Israeli war with Iran.
