International oil prices are generally stable on Friday. While assessing supply risks around Iran and the Straits of Hormuz, the market absorbs the impact of the large increase in United States crude oil stocks and the expected downward adjustment in global demand. Brent's crude oil is around $87 per barrel, WTI is above $81 and two benchmark oil prices are still expected to record an increase of about 4 per cent this week.
U.S. stock surged.
According to the United States Energy Information Agency, as of the week of August 7, the United States commercial crude oil stock had increased by 17.4 million barrels to a total of 424,400 million barrels. During the same period, United States crude oil imports rose to 7.3 million barrels per day.
Demand-side data are also weak. Over the past four weeks, the supply of petroleum products in the United States has declined by 2.1 per cent compared with the same period of the previous year, indicating that end-use consumption has not improved significantly. The rise in stocks and the slowdown in demand have weakened the momentum for continued rebounds in oil prices.
Expected reduced institutional requirements
The judgement of the major agencies regarding global demand for crude oil continues to weaken. OPEC currently projects an increase in global crude oil demand of about 600,000 barrels per day in 2026. For its part, the International Energy Agency expects that global demand for crude oil will decrease by 1.6 million barrels per day this year.
However, the supply side remains tight. The International Energy Agency projects a supply gap of 1.8 million barrels per day for the third quarter of the global crude oil market, including as a result of disruption of supply in the Middle East and limited trade flows.
The geohazard risk still supports the price.
With both the supply and demand signals offsetting each other, the oil price line remains in a chainsaw. The situation in the Middle East, particularly the supply risks associated with Iran, continues to underpin Brent and WTI.
In terms of price performance, Brent crude oil reports USD 87.08 per barrel, and WTI reports USD 81.31. Oil prices may still be additionally supported if supply disturbances in the Middle East expand; however, increases may be constrained if stocks continue to accumulate and demand is expected to remain weak.