Oil prices edged lower on Monday after gaining for four weeks as supply disruption worries eased on hopes of a ceasefire deal in Gaza, but the potential impact of Hurricane Beryl on supplies kept the slide in check.
Brent crude futures were down 42 cents, or 0.5%, at $86.12 a barrel, as at 1230 GMT. U.S. West Texas Intermediate (WTI) crude was at $82.64 a barrel, down 52 cents, or 0.63%.
Talks over a U.S. ceasefire plan to end the nine-month-old war in Gaza are under way and being mediated by Qatar and Egypt.
If anything concrete comes from the ceasefire talks, it will take some of geopolitical bid out of the market for now, said IG analyst Tony Sycamore.
“Oil did not take advantage of the weaker dollar, coming under some selling pressure on rising expectations of a ceasefire in the Middle East,” said Charalampos Pissouros, senior investment analyst at brokerage XM.
Meanwhile, in the U.S., Hurricane Beryl made landfall near Matagorda, Texas on Monday. Ports of Corpus Christi, Houston, Galveston, Freeport and Texas City closed on Sunday to prepare for hurricane.
Texas produces the most oil and natural gas than any area of the U.S.
“Weekly settlement prices suggest that investors liked what they saw in spite of the pre-weekend profit-taking in oil, which continues this morning on the prospect of the resumption of ceasefire talks between Israel and Hamas and the closure of Texan ports”, said PVM analyst Tamas Varga.
Port closures could bring a temporary halt to crude and liquefied natural gas exports, oil shipments to refineries and motor fuel deliveries from those plants.
“While this puts some offshore oil and gas production at risk, the concern when the storm makes landfall is the potential impact it could have on refinery infrastructure,” ING analysts led by Warren Patterson said in a note.
WTI gained 2.1% last week after data from the Energy Information Administration showed stockpiles for crude and refined products fell in the week ended June 28.
IG’s Sycamore said there is also a good chance of U.S. data showing another large weekly draw in U.S. oil inventories amid peak driving season.
Investors were also watching for any impact from elections in the UK, France and Iran last week on geopolitics and energy policies.
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