By Erwin Seba
HOUSTON (Reuters) -Crude oil prices fell on Tuesday as fears faded that Hurricane Beryl would disrupt supplies as the storm avoids most oil fields as it barrels towards Jamaica.
futures fell 36 cents, or 0.42%, to $86.24 a barrel. U.S. West Texas Intermediate crude settled at $82.81 a barrel, down 57 cents, or 0.68%.
Earlier on Tuesday, WTI rose $1 to $84.38 on concerns that Beryl could have a broader impact in offshore oil production areas in the US-regulated northern Gulf of Mexico as US demand for motor fuels increases.
Both benchmarks gained about 2% in the previous session.
But as new forecasts emerged Monday, traders were less concerned about supply issues, said Phil Flynn, an analyst at Price Futures Group.
“The markets came to realize that Beryl is not going to shut down large amounts of offshore oil production,” Flynn said. “Maybe some will be closed, but it will have minimal impact on the platforms.”
Hurricane Beryl is a dangerous Category 4 hurricane that is barreling through the Caribbean Sea. It is expected to weaken to a tropical storm by the time it enters the Gulf of Mexico late this week, according to the U.S. National Hurricane Center.
“We dodged a bullet on Beryl,” said John Kilduff, partner at Again Capital LLC. “But there is certainly an understanding that any storm that develops in the Gulf is going to be a big one.”
Sources said Tuesday after figures from the American Petroleum Institute last week showed oil and distillate stocks fell while gasoline rose.
The API figures showed crude inventories fell by 9.163 million barrels in the week ended June 28, the sources said, speaking on condition of anonymity. Gasoline inventories rose by 2.468 million barrels and distillates fell by 740,000 barrels.
