NEW YORK: Oil prices eased on Tuesday after traders learned that prolonged supply disruptions from Hurricane Beryl were unlikely after a U.S. oil-producing hub in Texas suffered less storm damage than feared.
Brent futures for September delivery fell 31 cents to $85.44 a barrel by 11:17 a.m. EDT (1517 GMT). U.S. crude fell 23 cents to $82.10 per barrel.
Although some offshore U.S. production sites were evacuated, ports closed and refining slowed, major refineries along the country’s Gulf Coast appeared to see minimal impact after Beryl weakened into a tropical storm.
“Early indications suggest that most energy infrastructure has come through unscathed,” ING analysts Warren Patterson and Ewa Manthey wrote in a client note, adding price action in crude oil and refined fuel markets reflected waning expectations of ongoing supply disruptions from the hurricane.
Texas accounts for more than 40% of crude supplied in the U.S., the world’s top producer.
“The sum total of these various developments appears to be negligible and temporary, as underscored by this week’s selling across the complex,” said Jim Ritterbusch of Ritterbusch and Associates.
Major Texas oil shipping ports were set to reopen on Tuesday, and some facilities were ramping up output again.
Several refiners such as Marathon Petroleum were also preparing to restart their refining units.
Market participants are also watching the situation in the Middle East. On Monday, oil prices settled down 1% on hopes a possible ceasefire deal in Gaza could reduce worries about global crude supply disruption.
Senior U.S. officials were in Egypt for talks on Monday, but gaps remained between the two sides, the White House said, and Hamas said a new Israeli push into Gaza threatened the potential agreement.
“Crude futures were inching lower early Tuesday after a second consecutive session of losses suggested an overdue pullback from (a) nine-week high,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Markets were also waiting for the release of key U.S. inflation data, with Federal Reserve Chair Powell set to appear before Congress on Tuesday and Wednesday, as investors wagered a slew of soft labour market data has greatly increased the chance of an interest rate cut in September to about 80%.
The “market will find a sympathetic bid if Powell’s comments are indeed friendly to a rate cut and if the U.S. CPI backs such language with a lower reading,” said John Evans, analyst at oil broker PVM.
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