DTN Oil Update
Oil Stays in Red as Demand Worries Cap Hormuz Crisis
SECAUCUS, N.J. (DTN) -- Crude and product futures remained in the red Thursday as demand downgrades from global energy agencies clashed with persistent physical supply blockades along the Strait of Hormuz.
NYMEX WTI crude for September delivery fell by $2.19, or 2.58%, to settle at $81.08 bbl. ICE Brent crude for October settled down $1.91, or 2.2%, at $87.07 bbl.
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Downstream, NYMEX ULSD for September delivery slipped by $0.0566, or 1.22%, to close at $4.2474 gallon. NYMEX RBOB for September retreated by $0.0309, or 0.98%, to finish at $3.1228 gallon.
By 3 p.m. ET, the U.S. Dollar Index slid 0.049 points to 99.85 against a basket of currencies.
Oil prices remained in the red after the International Energy Agency (IEA), in its August supply-demand outlook released Thursday, slashed its annual world oil demand forecast by another 510,000 bpd. It was the agency's latest demand reduction forced by the ongoing closure of the Strait of Hormuz and elevated fuel prices. Combined with earlier reductions, it takes a total of 1.6 million bpd from the IEA'S original demand forecast for 2026.
The IEA's revision comes on the heels of OPEC's decision on Wednesday, Aug. 12, to trim demand by 200,000 bpd -- the producer's fourth straight monthly cut -- to project uptake growth at 580,000 bpd.
Despite weakening demand projections, physical supply remains tightly restricted as diplomatic efforts between Washington and Tehran to reopen the Hormuz show no signs of progress. Independent tracking data showed vessel traffic in the transit corridor dropping to eight tankers on Tuesday, Aug. 11, contradicting claims from U.S. officials of expanding regional shipping volumes.
Tehran insists the waterway will remain closed until the U.S. pays war reparations and withdraws military vessels; terms U.S. President Donald Trump has firmly rejected. Tensions escalated further Thursday after Yemen's Houthi rebels claimed a drone attack on a Saudi Aramco refinery in Jizan, highlighting broader regional infrastructure risks.
Market momentum is also capped by Wednesday's U.S. Energy Information Administration report showing domestic commercial crude inventories surging by 17.4 million bbl to a three-year high.
The massive commercial build contrasted sharply with Strategic Petroleum Reserve stocks, which dropped 6.1 million bbl to a 43-year low of 298.7 million bbl.