Reports state that since Hurricane Beryl’s hazards to the supply of crude oil have diminished, oil prices have decreased. The anticipation of a supply of crude oil has caused the global commodity market to soar early. Due to this, the price of ICE Brent exceeded $87 per barrel last week.
In response to Hurricane Beryl’s far weaker landfall in Texas than anticipated last week, which allayed fears of a broad disruption of the oil market, prices fell once again, according to a report from ANZ Bank on Tuesday.
Based on available data, it seems that Hurricane Beryl’s worst has past, and the market is now waiting to see how much damage the energy infrastructure along the Texas coast has sustained.
Brent crude lost 0.5% to US$85.35 per barrel, and West Texas Intermediate crude fell 0.5% to US$81.89 per barrel at last look early Tuesday.
Still, concerns for the oil market remain with the hurricane knocking out power to 85% of Houston, prompting some oil companies to adjust operations, the bank noted. Exports could be delayed with the Port of Houston and Port of Corpus Christi shut down.
But some of this infrastructure is already resuming operations, such as the Port of Corpus Christi, a key crude oil export hub for the US.
The price action in crude oil and refined product cracks also suggests the market is little concerned about potential disruptions, said ING.
Early indications suggest that most energy infrastructure has come through unscathed, ING commodities strategists said in a note. Analysts noted that some refineries, offshore oil and gas platforms, ports, and LNG facilities were shut down as a precaution.
In Canada, heavy crude supplies are being threatened by wildfires, with Suncor Energy forced to curtail production at its Firebug oil sands site due to an out-of-control fire, ANZ Bank said.
The weather-related events come amid bullish signs for demand, with U.S. oil inventories down by a larger amount than expected last week, the bank said.
