Oil prices drop on weak demand outlook and rising U.S. inventories

Global oil prices have experienced a decline driven by weakening demand forecasts and a significant increase in United States crude oil inventories. The U.S. Energy Information Administration reported that inventories rose by 17.4 million barrels last week, reaching 424.4 million barrels—the largest weekly increase since early 2023.

Demand outlooks have also shifted. The International Energy Agency (IEA) projected a global demand decrease of 1.6 million barrels per day this year, a downward revision from previous estimates. Similarly, OPEC lowered its annual demand growth forecast from 780,000 barrels per day to 580,000 barrels per day.

Market volatility remains influenced by geopolitical tensions in the Middle East, particularly regarding supply stability through the Strait of Hormuz. While Brent and West Texas Intermediate (WTI) prices saw recent drops, analysts suggest that price fluctuations may be limited as long as regional conflicts persist.