Oil steadies near three-month low as OPEC+ cuts clash with demand fears

KUALA LUMPUR, 7 AUGUST 2026 —

Brent crude dipped 0.1% to $83.64 a barrel by 7 a.m. Eastern Time on August 6 2026, 8 cents below Tuesday’s close and $16.10 above the year-earlier level.

The contract, which sets global benchmarks, has held within a $80–$90 range since April 2026, averaging $84.30 so far this month against $87.20 in July. September futures were bid at $83.85 in Asian morning trade, indicating limited follow-through after the overnight move.

Traders are weighing whether OPEC+ supply curbs can tighten the market against signs that global demand is softening. The cartel’s June agreement to extend voluntary cuts of 2.2 million barrels a day into 2027 has lent support, yet inventory data released on August 5 showed U.S. crude stocks rose by 2.3 million barrels in the week to July 31, confounding forecasts for a 1.8 million-barrel draw.

Gasoline inventories fell by 1.1 million barrels, keeping pressure on refining margins. “Crude is being pulled in two directions,” said Energy Aspects analyst Amrita Sen. “The OPEC+ cuts are doing their job, but the macro backdrop remains soft.”

Goldman Sachs cited the inventory build in a note on August 6. The U.S. Energy Information Administration reported the data.

The market is also split between recession risk and the prospect of further supply restraints, according to Bank of America commodity strategist Francisco Blanch. “Oil remains range-bound between $80 and $90,” he said.

U.S. retail gasoline eased to $3.49 per gallon on August 5, down from $3.54 a week earlier, data from AAA showed. The decline lagged the crude drop because refiners had already locked in higher feedstock costs, illustrating the “rockets and feathers” effect described in the EIA’s July 2026 monthly report.

In Asia, refiners are running Middle Eastern crude at levels 5-7% below July’s intake, traders at Trafigura said. The shift follows a directive from Petroliam Nasional Bhd to trim term allocations by 3% for September loading programs.

Malaysia’s crude palm oil futures fell 1.2% to RM4,120 per tonne on August 6, tracking weaker vegetable-oil complex sentiment after crude oil’s modest retreat.

The Strategic Petroleum Reserve stood at 347 million barrels as of August 1 2026, unchanged for three weeks. The Biden administration has not drawn the SPR since March 2026, when it released 180,000 barrels to test logistics after Hurricane Carlotta disrupted Gulf Coast operations.

Looking ahead, the market will focus on two dates: August 14, when OPEC+ ministers hold an informal technical meeting, and August 21, the expiry of the September Brent futures contract. Open interest in the expiring contract stands at 1.9 million lots, CME Group data show.

“Until we see either a demand rebound or a supply surprise, Brent is likely to stay within its current range,” said ING’s head of commodities research Warren Patterson.