• U.S. crude futures fell 2.5% to $80.54 a barrel, the lowest level since July 20, driven by easing supply disruption fears.
  • Increased tanker traffic through the Strait of Hormuz has reduced perceived risks, while mixed global demand signals weigh on prices.
  • Analysts warn of continued volatility as geopolitical tensions and macro data vie for market influence.

Oil Prices Hit Multi-Month Low

U.S. West Texas Intermediate crude futures slid 2.5% to settle at $80.54 per barrel on Thursday, hitting their lowest point since July 20. The decline extends a recent pullback as traders reassess supply risks and demand prospects.

The drop comes amid reports of resumed tanker movements through the Strait of Hormuz, a key chokepoint for global oil shipments. Earlier concerns about potential disruptions linked to Middle East tensions have eased, prompting some speculative longs to unwind. “We’re seeing a repricing of risk premiums that were built in over the past few weeks,” said a market participant who declined to be named. “The reality of actual supply outages hasn’t materialized.”

Demand signals remain mixed, with economic data pointing to persistent inflation and slowing growth in major economies. While the U.S. and China have shown pockets of resilience, broader macroeconomic headwinds continue to cloud the outlook. The combination of ample supply and tepid demand growth has pushed futures toward the lower end of recent trading ranges.

The price action also reflects broader market sentiment: a strong U.S. dollar has made dollar-denominated commodities more expensive for foreign buyers, further pressuring crude. Meanwhile, OPEC+ members have signaled no immediate output policy changes, leaving the cartel’s production levels steady.

Investors are now focused on weekly inventory data and comments from Federal Reserve officials for clues on future demand. A sustained break below $80 could trigger additional selling, though geopolitical headlines remain a wildcard. “The market is caught between easing supply fears and uncertain demand,” said another trader. “It’s a fragile balance.”

Correction: An earlier version of this article misstated the date of the previous low. It has been updated to reflect July 20.