Oil prices retreated by over 3% on Thursday, ending a multi-day rally as traders shifted their focus toward cooling global demand and an unexpected surge in U.S. crude stockpiles. According to data from the Energy Information Administration, domestic inventories saw their most significant weekly jump since early 2023, far exceeding analyst expectations. This bearish outlook was further compounded by downward revisions in demand growth forecasts from both OPEC and the International Energy Agency, suggesting that elevated prices and broader economic pressures are curbing global consumption more than previously anticipated.

Despite this downward pressure, the market remains cautious due to ongoing geopolitical volatility, particularly surrounding the Strait of Hormuz. Conflicting assertions from U.S. and Iranian officials regarding control of this vital shipping lane continue to create uncertainty, even as vessel traffic data shows signs of slowing. Additionally, supply chain disruptions—ranging from Russian refinery maintenance following drone attacks to a fatal facility blast in Rotterdam—have injected a layer of complexity into the market, keeping traders on edge despite the prevailing concerns over weakened demand.