July 8 2024: Oil prices edged lower on Monday after four weeks of gains as supply disruption concerns eased on hopes of a ceasefire deal in Gaza. However, the potential impact of Hurricane Beryl on supplies kept the slide in check.
By 1230 GMT, Brent crude futures were down 42 cents, or 0.5%, at $86.12 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 52 cents, or 0.63%, to $82.64 a barrel.
Negotiations over a U.S. ceasefire plan to end the nine-month-old conflict in Gaza are being mediated by Qatar and Egypt.
“If anything concrete comes from the ceasefire talks, it will take some of the geopolitical bid out of the market for now,” said IG analyst Tony Sycamore.
“Oil did not take advantage of the weaker dollar, coming under some selling pressure on rising expectations of a ceasefire in the Middle East,” added Charalampos Pissouros, senior investment analyst at brokerage XM.
Meanwhile, Hurricane Beryl made landfall near Matagorda, Texas on Monday, leading to the closure of ports in Corpus Christi, Houston, Galveston, Freeport, and Texas City on Sunday in preparation for the hurricane. Texas is the largest oil and natural gas producer in the U.S.
“Weekly settlement prices suggest that investors liked what they saw despite the pre-weekend profit-taking in oil, which continues this morning due to the prospect of ceasefire talks between Israel and Hamas and the closure of Texan ports,” said PVM analyst Tamas Varga.
Port closures could temporarily halt crude and liquefied natural gas exports, oil shipments to refineries, and motor fuel deliveries from those plants. “While this puts some offshore oil and gas production at risk, the concern when the storm makes landfall is the potential impact it could have on refinery infrastructure,” ING analysts led by Warren Patterson noted.
WTI gained 2.1% last week after data from the Energy Information Administration showed stockpiles for crude and refined products fell in the week ended June 28.
IG’s Sycamore mentioned a good chance of U.S. data showing another large weekly draw in U.S. oil inventories amid peak driving season.
Investors are also monitoring the impact of elections in the UK, France, and Iran last week on geopolitics and energy policies.
