Oil prices retreated on Tuesday as concerns over supply disruptions caused by Storm Beryl’s passage through the United States eased.
Brent Crude Oil:
The price of Brent crude oil, the international benchmark, for September delivery, dipped 0.43% to $83.38 per barrel around 10:00 GMT.
Similarly, the U.S. benchmark, West Texas Intermediate (WTI) crude oil, for August delivery, decreased by 0.51% to $81.91 per barrel.
Storm Beryl’s Limited Impact:
Despite causing heavy rains, flooding, power outages, and tragically, at least five deaths in the southern U.S., Storm Beryl’s impact on oil infrastructure in Texas was less severe than anticipated. This led to a slight decline in oil prices as fears of supply disruptions subsided.
Analysts, including Ricardo Evangelista from ActivTrades, noted that energy infrastructure in the region remained largely unaffected by the storm, easing concerns about oil supply. Matt Britzman of Hargreaves Lansdown echoed this sentiment, stating that Beryl’s impact on U.S. oil markets would likely be minimal or nonexistent.
Extreme Weather as a Market Factor:
While the storm’s impact was limited, it served as a reminder of the increasing importance of extreme weather events as a factor influencing investor decisions in the oil market.
The market eagerly awaits the release of June’s U.S. inflation data this week. A low figure, confirming recent reports of a slowing U.S. economy, could increase the likelihood of an interest rate cut as early as September.
Potential Impact on Oil Prices:
A potential interest rate cut could weaken the U.S. dollar, thereby boosting oil demand and prices. Since crude oil is priced in dollars, a weaker dollar makes oil more affordable for buyers using other currencies, leading to increased demand.