Oil prices drop as investors weigh lower demand forecasts against US-Iran talks deadlock

LONDON — Oil prices fell ‌in volatile trading on Wednesday, having earlier traded $1 higher, after forecasters cut projections for 2026 global oil demand, while attacks on ships in the Middle East continued as talks to end the Iran ​war hit an impasse.Brent futures were down 49 cents, or 0.55%, at $88.42 a ​barrel by 1315 GMT.US West Texas Intermediate (WTI) crude fell 25 ⁠cents, or 0.3%, to $82.95.The Organization of Petroleum Exporting Countries lowered its world oil demand growth ​forecast for 2026 to 580,000 barrels per day, it said in its monthly oil ​market report.Rival forecaster the International Energy Agency, meanwhile, slashed its own 2026 demand projections and now expects a 1.6 million bpd contraction this year.

However, the Paris-based agency is also predicting a 4.3 million ​bpd drop in supply this year, and an overall 2026 deficit of around 1.27 ​million bpd.Adding to downward pressure on prices, US crude inventories rose sharply last week, according to preliminary ‌American ⁠Petroleum Institute data, which if confirmed later on Wednesday by the Energy Information Administration could ease market concerns about supply tightness, Haitong Futures analysts said in a note.Prices rose earlier after a senior Iranian source told Reuters there ​were no discussions between ​Iran and the ⁠US to extend their cease-fire because, from Tehran’s perspective, the deal had no start date and so there was nothing to extend.The ​United States and Yemen’s Iran-aligned Houthis reported separate attacks on shipping in ​the Strait ⁠of Hormuz and the Bab el-Mandeb Strait on Tuesday, two crucial export routes for Middle Eastern oil and gas in addition to the Suez Canal.Shipping data showed the number ⁠of vessels ​transiting Hormuz fell to a one-week low of ​eight on Tuesday.Before the war, 125 to 140 vessels passed through the crucial waterway each day....