WTI climbs toward $90 as Middle East supply risks dominate

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WTI climbs toward $90 as Middle East supply risks dominate

U.S. inventories remain a bearish counterweight

At the same time, U.S. data look rather bearish. In the week ending August 14, commercial crude inventories in the U.S. increased by another 4.4 million barrels to 428.8 million, while the market had expected a much smaller change or a decline. This was already the third consecutive weekly increase after an especially large build of 17.4 million barrels a week earlier.

Gasoline inventories also increased by around 0.7 million barrels, while gasoline demand declined to 8.7 million barrels per day. However, the details of the EIA report were significantly stronger than the headline figure: inventories at the key Cushing hub fell by 1.3 million barrels to 21.3 million, distillate inventories decreased by 1.5 million barrels and remain around 13% below the five-year average. Refineries were operating at around 97.2% utilization, while crude oil exports increased by roughly 1 million barrels per day. Therefore, the market is currently treating the overall increase in inventories more as a restraining factor than as a convincing signal of excess supply.

Supply losses outweigh weaker demand outlook

The medium-term picture remains less clear. The IEA and OPEC have both downgraded their demand estimates, although the scale of the revisions differs significantly. The IEA now expects global oil consumption to decline by around 1.6 million barrels per day in 2026, linking this to high fuel prices, trade disruptions and weaker economic activity. OPEC remains considerably more optimistic, but it has also cut its forecast for the fourth consecutive month and now expects demand growth of only around 580,000 barrels per day.

At the same time, the IEA forecasts a decline in global supply of 4.3 million barrels per day this year due to losses in the Middle East and Russia. This creates an unusual situation: weak demand should limit prices, but the actual reduction in supply and rapid depletion of inventories are currently outweighing this factor. According to the IEA, global observed oil inventories fell by another 69 million barrels in July, while the decline since the start of the conflict has reached around 410 million barrels.

Thus, in the near term, WTI may maintain positive momentum and once again test today’s high. A break above it would lead to further growth toward $89.60-90.00, where moderate selling interest may emerge. Pullbacks, as stated in the article WTI retreats from highs but Hormuz risks keep oil supported, may attract buying interest, and only convincing signs of improvement in the situation in the Middle East could provide a reason for a more sustained decline in oil prices.

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