Oil falls 1%, but Brent holds above $85

Oil drilling rigs

Oil prices settled lower today, Aug. 7, as markets assessed lower demand expectations as the peak summer driving season in the United States abates.

International benchmark Brent crude closed down 1%, or 90 cents, at $85.34 a barrel. West Texas Intermediate (WTI) crude fell nearly 1%, 88 cents, to $81.94 a barrel.

The decline follows six consecutive weeks of gains for both grades, as the natural end of the peak summer driving season affects the markets since lower demand for gasoline will lead to a similar decline in demand for oil.

In conjunction with the extensions of voluntary production cuts from OPEC+, Saudi Aramco announced that it increased the official selling price of Arab Light crude oil to Asia by 30 cents a barrel during September to $3.50 a barrel, above the average price of Oman and Dubai. 

Meanwhile, prices of Russian crude oil imports to India fell to their lowest level since the war in Ukraine. The average cost of a barrel of Russian crude oil, including shipping costs to India's ports, reached $68.17 during June, down from $70.17 in the previous month, and $100.48 last year, Bloomberg reported, citing India's Ministry of Commerce and Industry.

Baker Hughes data showed that the number of oil exploration rigs worldwide increased by 20 to 1,820 in July, from 1,800 in June.