Crude oil prices declined on Thursday as a sharp increase in United States inventories and weakening global demand expectations outweighed concerns over continuing supply disruptions in the Middle East.
Brent crude oil, against which Nigerian crude oil is priced, dropped $1.66 or 1.9 percent to $87.32 per barrel at 10:35 a.m. Nigerian time.
U.S. West Texas Intermediate crude fell $1.62 or 1.95 percent to $81.65 per barrel after advancing for five consecutive sessions.
Selling pressure intensified after data from the U.S. Energy Information Administration showed commercial crude inventories increased by 17.4 million barrels to 424.4 million barrels in the week ended August 7.
The increase was the largest weekly build since January 2023 and contrasted sharply with market expectations for a 1.4 million-barrel decline.
The inventory surge was driven partly by weaker U.S. crude exports and stronger imports. U.S. crude exports dropped to 3.06 million barrels per day, their lowest level since November 2025, while net crude imports increased by 1.77 million barrels per day.
The inventory data reinforced concerns about the outlook for oil consumption after major energy forecasters revised their demand expectations lower.
The Organization of the Petroleum Exporting Countries lowered its forecast for global oil demand growth in 2026 to 580,000 barrels per day.
The International Energy Agency presented an even weaker outlook, forecasting global consumption could contract by 1.6 million barrels per day this year as elevated energy prices and supply disruptions associated with the Middle East conflict weigh on economic activity.
Despite the bearish inventory and demand signals, geopolitical risks continued to provide some support to crude prices.
Negotiations involving the United States and Iran have made little progress, while disruption to shipping through the strategically important Strait of Hormuz remains a major concern for global energy markets.
Vessel crossings through the Strait, excluding container ships, dropped to five on Wednesday, the lowest level in three weeks, according to shipping data cited by Reuters.
Supply risks have also persisted around the Black Sea, with attacks involving Russia and Ukraine adding another layer of uncertainty to global energy flows.
For Nigeria, the decline in Brent is significant because crude oil remains a major source of export earnings and government revenue.
A sustained retreat from recent highs could reduce the revenue advantage created by elevated global oil prices, particularly if weaker demand continues to pressure the market.
However, continued disruptions around the Strait of Hormuz could limit further declines, leaving crude prices caught between weakening demand indicators and persistent geopolitical supply risks.
