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.
Two ships attacked in Middle East
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.