BEIJING/SINGAPORE, Aug 13 — Oil prices dipped on Thursday as investors assessed prospects for weaker global demand this year, though they were underpinned by a lack of major progress in talks over the blockaded Strait of Hormuz and disruptions to supply.
Brent futures slipped ¢11, or 0.12 per cent, to US$88.87 a barrel by 0624 GMT, trimming gains over the prior six sessions.
U.S. West Texas Intermediate crude fell ¢16, or 0.19 per cent, to US$83.11, after advancing over the past five sessions.
"Buyers continue to dominate in the short term, following the recovery over the past several sessions. However, the speed of the advance could also trigger periods of volatility and profit-taking around current levels," said XS.com senior market analyst Antonio Di Giacomo.
The market was trying to determine whether potential supply constraints from disruptions in the Middle East would be sufficient to offset a possible moderation in global consumption, he added.
"This combination leaves WTI particularly sensitive to both geopolitical developments and new economic and energy data," he added.
On Wednesday, a senior Iranian source said there had been no progress in talks to revive an interim deal agreed in June and to define a timeframe for its implementation.
With no change in the prospect of reopening the Strait of Hormuz, the key driver of the past week's higher prices, attention turned to the demand outlook after a surprise build in United States (US) crude stocks and lower consumption forecasts from the Organisation of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA).
The Energy Information Administration's data on Wednesday revealed that US commercial crude oil inventories made their largest weekly gain since January 2023 as exports slumped.
It noted that crude inventories rose by 17.4 million barrels to 424.4 million in the week ended August 7, their highest since June 5. This is in contrast to Reuters' poll expectations for a 1.4 million-barrel draw.
On the same day, OPEC lowered its forecast for global oil demand growth in 2026 to 580,000 barrels per day in its monthly oil market report.
The IEA said it expected a contraction of 1.6 million bpd in consumption this year, up from a forecast of 1 million bpd last month, with demand curtailed by higher prices and supply constrained by the US-Israeli war with Iran.
Still, the deadlocked talks between Iran and the US to end their war have kept a floor under prices.
"The safety situation for navigation in these waters has further deteriorated, forcing vessels to turn off their signals, which reduces transparency in shipping and makes it more difficult for the market to track and assess actual supply levels," analysts at Haitong Futures said in a note.
