Oil slumps as Hurricane Beryl risks ease

Oil prices decline as Hurricane Beryl risks relating to crude supply have eased, according to reports. The global commodity market has surged earlier on expectation of crude oil supply. This lifted ICE Brent price above $87 per barrel last week.

Prices retreated again as supply risks eased after Hurricane Beryl made landfall in Texas significantly weaker than last week’s expectations, reducing concerns there would be widespread oil market disruption, ANZ Bank said in a note on Tuesday.

Indications show that the worst of Hurricane Beryl appears to have passed and now the market awaits an assessment of damage to energy infrastructure along the Texan coast.

Brent crude lost 0.5% to US$85.35 per barrel and West Texas Intermediate crude fell 0.5% to US$81.89/b 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 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 fires, 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.