Oil prices fell below $1 per barrel as investors reacted to the International Energy Agency (IEA) lowering its global oil demand forecast for 2026.
Brent crude futures dropped $1.26 (1.82%) to $68.14 per barrel, while U.S. West Texas Intermediate fell $1.24 (1.92%) to $63.39 by mid-morning.
The big picture: The IEA said global oil demand will grow more slowly than previously expected this year and projected a sizeable supply surplus, despite previous supply outages.
- Oil prices had earlier been supported by concerns over potential U.S. military action against Iran, but these worries subsided after renewed diplomatic talks were announced.
- President Trump stated that negotiations with Iran will continue, though the date and venue for further talks remain undecided, and hinted at possibly sending more U.S. military assets to the Middle East if needed.
Zoom in: U.S. crude inventories grew by 8.5 million barrels to 428.8 million barrels last week, much higher than expected, with refinery utilization rates dropping 1.1 percentage points to 89.4%.
- Russia’s seaborne oil product exports increased 0.7% in January to 9.12 million metric tons due to higher fuel output and lower domestic demand.
