Crude Oil Prices Drop as Demand, Supply Concerns Ease
Oil prices edged lower Thursday as a sharp rise in US crude inventories and higher global production eased supply concerns, while expectations of an extended US-Iran ceasefire further reduced disruption risks.
International benchmark Brent crude futures for October delivery traded at $88.84 per barrel, down 0.2% from the previous close of $88.98. US benchmark West Texas Intermediate (WTI) crude futures for September delivery traded at $82.99 per barrel, down 0.3% from $83.27.
US Energy Information Administration (EIA) said commercial crude oil inventories rose by about 17.4 million barrels last week to 424.4 million barrels, against market expectations for a 1.7 million-barrel decline.
The unexpected increase in inventory eased supply concerns and put downward pressure on prices. The impact was limited by a 6.1 million-barrel decline in strategic petroleum reserves, as releases from the reserves contributed to the increase in commercial stocks.
International Energy Agency (IEA) said global oil supply rose by 2.4 million barrels per day (bpd) in July to 101.5 million bpd as Gulf producers continued to restore production lost during the conflict.
Higher OPEC output also weighed on prices. According to OPEC’s monthly oil market report, the group’s crude production increased by 1.65 million bpd in July to 23.63 million bpd.
IEA’s projection that global oil supply will decline by 4.3 million bpd by the end of the year to average 102 million bpd, however, limited downward pressure.
Pakistani government sources said the US and Iran had “agreed” to extend the 60-day ceasefire under the Islamabad Accord, which expires Aug. 17.
Speaking to Anadolu, the sources said both sides had conveyed their approval to mediators, while talks continued over the duration of the extension.
The statements eased some concerns over supply disruptions, but conflicting remarks from Washington and Tehran over the Strait of Hormuz limited the decline.
US President Donald Trump said the US had “full control” over the Strait of Hormuz, while Iran said the waterway would remain closed until Washington changes its behaviour and accepts Tehran’s conditions. Oil Prices Inch Higher, Brent Nears $90 on Peace Talks Doubt
