OIL prices eased more than 1 per cent on Tuesday after traders learned that prolonged supply disruptions from Hurricane Beryl were unlikely after a US oil-producing hub in Texas suffered less storm damage than feared.
Brent crude futures settled at US$84.66 a barrel, falling US$1.09 a barrel, or 1.3 per cent. US crude settled at US$81.41 at, losing 92 cents, or 1.1 per cent.
Although some offshore US production sites were evacuated, ports closed and refining slowed, major refineries along the country’s Gulf Coast appeared to sustain 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. Price action in crude oil and refined fuel markets reflected waning expectations of ongoing supply disruptions from the hurricane, they added.
Texas accounts for more than 40 per cent of crude supplied in the US, the world’s top producer.
“As we get more reports out of Texas and Houston that things are somewhat flooded but OK, angst leaves the market,” said John Kilduff, a partner at Again Capital in New York.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
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 preparing to restart their refining units.
Oil investors also had a mixed reaction to comments by Federal Reserve Chair Jerome Powell, who told a Congressional hearing on Tuesday that the economy was no longer overheated and that the job market had eased.
Despite indicating a possible nearing of interest rate cuts, oil prices sank farther after the remarks as a weakening economy could hinder crude demand.
“The comments cut both ways,” Kilduff said.
Market participants are also watching the situation in the Middle East. On Monday, oil prices settled down 1 per cent on hopes a possible ceasefire deal in Gaza could reduce worries about global crude supply disruption.
Senior US 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 a 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. REUTERS
