Crude falls as Hurricane Beryl fears fade

7:08 pm Tuesday, July 02nd, 2024

By Erwin Seba

HOUSTON (Reuters) -Crude oil prices fell on Tuesday as fears faded that Hurricane Beryl would disrupt supplies as the storm will avoid most oil fields as it barrels toward Jamaica.

Brent crude futures settled down 36 cents, or 0.42%, at $86.24 a barrel. U.S. West Texas Intermediate crude settled at $82.81 a barrel, down 57 cents or 0.68%.

Earlier on Tuesday, WTI rose $1 to $84.38 on fears Beryl might have a wider impact in offshore oil production areas in the U.S.-regulated northern Gulf of Mexico as U.S. demand for motor fuels is increasing.

Both benchmarks gained about 2% in the previous session.

But as new forecasts emerged on Monday, traders were less fearful of supply problems, said Phil Flynn, analyst with the Price Futures Group.

“Markets came to the realization that Beryl is not going to shut down any major amounts of offshore oil production,” Flynn said. “We may see some shut, but it’s going to have a minimal impact on platforms.”

Hurricane Beryl is a dangerous Category 4 hurricane tearing through the Caribbean Sea. It is expected to have weakened into a tropical storm by the time it enters the Gulf of Mexico late this week, according to the U.S. National Hurricane Center.

“We dodged a bullet on Beryl,” said John Kilduff, partner with Again Capital LLC. “But, there definitely is an understanding that any storm that develops in the Gulf is going to be a big one.”

Sources said on Tuesday after that American Petroleum Institute figures for last week showed U.S. crude oil and distillates inventories fell while gasoline rose.

The API figures showed crude stocks were down by 9.163 million barrels in the week ended June 28, the sources said, speaking on condition of anonymity. Gasoline inventories rose by 2.468 million barrels, and distillates fell by 740,000 barrels.

(Reporting by Erwin Seba in Houston; Additonal reporting by Arunima Kumar in Bengaluru, Mohi Narayan in New Delhi and Colleen Howe in Beijing; Editing by David Evans, David Holmes and Deepa Babington)