International oil prices declined more than 2% on August 13 after a week of gains as concerns about weakening global demand and a large build in US crude stocks weighed on the market [1, 2, 3, 4, 5, 6]. Brent crude futures closed down $1.91 (2.15%) at $87.07 per barrel, while US West Texas Intermediate (WTI) crude fell $2.02 (2.4%) to settle at $81.25 per barrel on the same day [3, 4, 5, 7].
US commercial crude inventories surged by 17.4 million barrels in the week ended August 7, the largest weekly increase since January 2023, bringing total stocks to 424.4 million barrels, the highest level since early June [3, 5, 6]. This build in inventories added downward pressure despite ongoing geopolitical risks in key supply regions.
The Organization of the Petroleum Exporting Countries (OPEC) recently lowered its 2026 world oil demand growth forecast to just 580,000 barrels per day, reflecting concerns about slower economic activity [3, 5, 6]. Meanwhile, the International Energy Agency (IEA) revised its outlook for 2023 oil consumption, expecting a contraction of 1.6 million barrels per day, worsening from the 1 million bpd decline it projected last month [3, 5].
Geopolitical tensions remain significant. Yemen’s Houthi rebels launched a drone attack on Saudi Aramco’s Jazan refinery, delaying operations. A Houthi military source said the strike responded to Riyadh’s violations of Yemeni airspace [3, 4, 5, 6, 8]. The US and Iran remain locked in conflict over control of the Strait of Hormuz, raising ongoing concerns about oil supply disruptions [3, 6, 8]. Despite these risks supporting prices, market focus has stayed firmly on demand weakness and rising US crude inventories [3, 5, 6].
US Strategic Petroleum Reserve levels fell by about 6.1 million barrels last week to 298.7 million barrels, the lowest since January 1983, signaling further shifts in US oil balances [8]. Recent US inflation data showed producer prices flat in July and cooling consumer inflation, prompting expectations that the Federal Reserve may pause rate hikes in September, which also influences market sentiment [5, 7]. Bill Merz, head of capital markets research at U.S. Bank Asset Management, noted uncertainty remains over the Fed’s interpretation of economic data despite stable market conditions [7].
Oil prices had surged more than 5% on August 10 as rising US-Iran tensions and disrupted hopes for reopening the Strait of Hormuz pushed markets higher. Dennis Kissler, senior trading vice president at BOK Financial, remarked that traders expect supply tightness to persist given Iran’s increased demands [8]. However, those gains reversed on August 13 amid the growing concerns over weak demand and inventory buildup.
In Asian early electronic trading on August 14, Brent and WTI crude prices fluctuated narrowly near their prior close, stabilizing after the steep declines seen the previous day [6].
