Crude oil prices mixed as OPEC, IEA cut demand outlook

Oil prices traded mixed on Wednesday after major energy agencies lowered their forecasts for global oil demand, offsetting support from continued geopolitical tensions and shipping disruptions in the Middle East.

Brent crude futures were down 0.25%, at $88.69, while US WTI crude was up 0.22% and was trading at $83.44.

Both benchmarks had traded about $1 higher earlier in the session as investors reacted to developments surrounding the Iran conflict and attacks on commercial shipping.

The market also weighed preliminary data showing a sharp increase in US crude inventories, while analysts continued to monitor the impact of the prolonged disruption to oil flows through key Middle Eastern shipping routes.

Demand outlook weakens as OPEC and IEA cut forecasts

The Organisation of Petroleum Exporting Countries (OPEC) reduced its forecast for global oil demand growth in 2026 to 580,000 barrels per day in its latest monthly oil market report.

The International Energy Agency (IEA) also revised its outlook lower, projecting a contraction in global oil demand of 1.6 million barrels per day this year.

The Paris-based agency also expects global oil supply to decline by 4.3 million barrels per day this year, resulting in an overall supply deficit of around 1.27 million barrels per day in 2026.

BNY said the IEA’s latest report points to a market that became increasingly constrained during July, with geopolitical tensions continuing to disrupt global energy flows.

BNY also highlighted the agency’s revised demand outlook, noting that the IEA cut its 2026 forecast and now expects oil demand to decline by 1.6 million barrels per day, “510k b/d lower than last month’s estimate,” as the prolonged closure of the Strait of Hormuz and higher oil prices continue to weigh on consumption.

At the same time, preliminary data from the American Petroleum Institute indicated US crude inventories rose sharply last week.

Analysts at Haitong Futures said that if confirmed by official Energy Information Administration data later on Wednesday, the increase could help ease concerns over supply tightness.

Shipping attacks and Hormuz disruption keep supply risks elevated

Oil prices initially moved higher after a senior Iranian source told Reuters there were no discussions between Iran and the United States to extend their ceasefire because Tehran considers there was no official start date to the agreement.

Meanwhile, separate attacks on commercial shipping were reported in both the Strait of Hormuz and the Bab el-Mandeb Strait, two critical routes for Middle Eastern oil and gas exports.

Shipping activity through the Strait of Hormuz also remained well below historical levels.

Data showed only eight vessels transited the waterway on Tuesday, compared with 125 to 140 vessels per day before the conflict began.

The continued disruption to maritime traffic has kept concerns over global energy supplies elevated despite weaker demand projections.

With so much uncertainty still driving oil prices, retail interest in the market — often via CFD brokers — is likely to stay elevated.

IEA sees tighter inventories despite higher production

The IEA said global oil supply increased to 101.5 million barrels per day in July, but cautioned that output remained below year-earlier levels as Gulf production continued to be disrupted.

The report also pointed to subdued refining activity, saying refinery crude throughputs rose to 80.9 million b/d in July but “remained nearly 5 million b/d below last year’s levels,” with further reductions in third-quarter refinery runs expected.

The IEA further noted that global inventories continued to tighten, reporting that “Observed inventories fell by 69 million barrels in July,” while crude prices climbed sharply amid backwardation and tighter refined product markets.

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