Oil prices near $89 held steady on Wednesday as traders weighed an Iran-US stalemate, fresh shipping attacks, and a surprise rise in US crude stocks. Brent settled near $89 a barrel, while WTI ended near $83. However, the market showed little net movement despite the scale of the headlines.
A senior Iranian source told Reuters that Tehran and Washington are not discussing any extension of their ceasefire. The source said the current arrangement had no defined start date, so there was nothing formal to extend. Meanwhile, Pakistan’s Foreign Ministry said it still supports direct and indirect contacts between the two sides and that the five-day ceasefire deadline could still be delayed.
Both the US and Houthi forces also reported separate attacks on shipping in the Strait of Hormuz and the Bab el-Mandeb Strait. These routes are key export corridors for oil and gas. Vessel data showed Hormuz transits fell to about eight on Tuesday, down from a pre-war daily average of 125 to 140.
Oil Prices Near $89 Despite Demand Cuts
On the supply side, OPEC lowered its 2026 global demand growth forecast to about 580,000 barrels a day in its latest monthly report. The IEA also cut its outlook and now expects global oil demand to shrink by about 1.6 million barrels a day this year. Analysts said those cuts likely reflect supply access problems, especially for Asian refiners, rather than a broad collapse in end demand.
However, the IEA also raised its third-quarter supply deficit forecast to about 1.8 million barrels a day. That was more than double its earlier estimate of about 800,000 barrels a day. It also warned that inventory buffers are falling quickly, which raises the risk tied to any further delay in reopening Hormuz.
Surprise US Crude Build Caps Gains
US commercial crude inventories posted their biggest weekly increase since early 2023, rising by about 17 million barrels. At the same time, the Strategic Petroleum Reserve fell by about 6 million barrels, leaving a net build of roughly 11 million barrels. Analysts linked the increase mainly to weak crude exports and higher imports during the week.
Gasoline and distillate inventories both declined, though by less than expected. US production stayed broadly steady at about 13.8 million barrels a day. As a result, oil prices near $89 remained pinned between weaker inventory data and a wider supply deficit outlook.
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Source: InvestingLive
