📉 Global Oil Prices Drop Over 1.5% Amid Demand Cut Forecasts

Global crude oil prices fell on Thursday due to lowered demand projections for 2026, though persistent supply constraints from ongoing U.S.-Iran conflict kept a floor under market declines. • Global Market Movements: Brent crude fell 1.5% (down $1.29) to US$ 87.69/bbl, while U.S. West Texas Intermediate (WTI) dropped 1.6% (down $1.30) to US$ 81.97/bbl. • Demand Forecast Cuts: OPEC reduced its 2026 global demand growth forecast to 580,000 bpd. The International Energy Agency (IEA) expects a consumption contraction of 1.6 million bpd this year (revised down from 1.0 million bpd) due to elevated fuel prices and supply disruptions. • Inventory Build & Middle East Tension: Prices were further weighed down by a surge in U.S. crude inventories, which rose by 17.4 Mn barrels to 424.4 Mn barrels. However, deadlocked U.S.-Iran talks and navigation risks in the Strait of Hormuz and Bab el-Mandeb limit further price drops. • Sri Lanka Macro Context: High global energy prices directly pressure Sri Lanka's trade balance and foreign exchange reserves, as refined petroleum & crude oil imports constitute a major share of total import costs. Declining global benchmark prices could offer marginal relief to the domestic energy, manufacturing, and logistics & transport sectors if price dips persist.