Oil Prices Stabilize as Hurricane Beryl Impact Less Severe Than Anticipated

Oil prices remained relatively stable on Tuesday as the impact of Hurricane Beryl on a major U.S. oil-producing hub in Texas proved less severe than initially feared. The storm, which weakened into a tropical storm after making landfall, caused minimal disruption to major refineries along the U.S. Gulf Coast.

Brent crude futures saw a slight increase of 4 cents to $85.79 a barrel, while U.S. West Texas Intermediate (WTI) crude also edged up 2 cents to $82.35.

Although refining activity slowed down and some production sites were evacuated, the overall impact on oil production and refining capacity in Texas, which accounts for 40% of U.S. crude oil production, was limited.

Major oil-shipping ports around Corpus Christi, Galveston, and Houston had been closed as a precautionary measure ahead of the storm. However, the Corpus Christi Ship Channel has already reopened, and the Port of Houston is expected to resume operations later on Tuesday.

Several key refineries, including Marathon Petroleum, are also preparing to restart their refining units, further easing concerns about supply disruptions.

Meanwhile, market participants are closely monitoring the situation in the Middle East, where hopes of a potential ceasefire deal in Gaza could alleviate worries about global crude supply disruptions. However, negotiations are ongoing, and significant gaps remain between the two sides.

Investors are also eagerly awaiting the release of key U.S. inflation data, with Federal Reserve Chair Jerome Powell scheduled to testify before Congress on Tuesday and Wednesday. Recent soft labor market data has fueled expectations of an interest rate cut in September, with the probability now estimated at around 80%.

Further support for oil prices comes from robust liftings of Saudi crude by Asian buyers on a contractual basis, with August exports to China expected to increase for the first time in four months.

In summary, oil prices stabilized on Tuesday as the impact of Hurricane Beryl on U.S. oil production and refining proved less severe than anticipated. Market focus has shifted to geopolitical developments in the Middle East, upcoming U.S. inflation data, and Federal Reserve Chair Powell’s testimony before Congress.