HOUSTON, July 2 – Crude oil prices declined on Tuesday as concerns eased over Hurricane Beryl’s potential disruption of supplies. The storm is expected to bypass most oil fields as it heads toward Jamaica.
Brent crude futures dropped 36 cents, or 0.42%, settling at $86.24 per barrel. U.S. West Texas Intermediate (WTI) crude decreased by 57 cents, or 0.68%, to settle at $82.81 per barrel.
Earlier in the day, WTI had risen by $1 to $84.38 due to initial fears that Beryl might significantly impact offshore oil production areas in the northern Gulf of Mexico, regulated by the U.S., amid rising demand for motor fuels.
Both benchmarks had gained about 2% in the previous session.
However, as updated forecasts were released on Monday, traders’ concerns about supply disruptions diminished, according to Phil Flynn, an analyst with the Price Futures Group.
“Markets realized that Beryl is not going to shut down any major offshore oil production,” Flynn said. “While there may be some shutdowns, the impact on platforms will be minimal.”
Hurricane Beryl, currently a dangerous Category 4 storm, is tearing through the Caribbean Sea. The U.S. National Hurricane Center predicts it will weaken to a tropical storm by the time it enters the Gulf of Mexico later this week.
“We dodged a bullet with Beryl,” said John Kilduff, a partner with Again Capital LLC. “But there’s an understanding that any storm developing in the Gulf could be significant.”
Sources indicated that data from the American Petroleum Institute (API) for the previous week showed a decline in U.S. crude oil and distillate inventories, while gasoline inventories increased.
According to these sources, who spoke on condition of anonymity, API figures revealed that crude stocks fell by 9.163 million barrels in the week ending June 28. Gasoline inventories rose by 2.468 million barrels, and distillate inventories decreased by 740,000 barrels.
