By Laila Kearney
NEW YORK (Reuters) -Oil prices fell more than 1% on Tuesday as traders learned that long-term supply disruptions from Hurricane Beryl were unlikely after a U.S. oil-producing center in Texas suffered less storm damage than feared.
futures settled at $84.66 per barrel and fell $1.09 per barrel, or 1.3%. settled at $81.41, a loss of 92 cents, or 1.1%.
Although some U.S. offshore production sites were evacuated, ports closed and refining slowed, major refineries along the country’s Gulf Coast appeared to have minimal impact after Beryl weakened to a tropical storm.
“Early indications suggest that most energy infrastructure has come through unscathed,” ING analysts Warren Patterson and Ewa Manthey wrote in a client note. Price action in crude oil and refined fuel markets reflected declining expectations of continued supply disruptions due to the hurricane, she added.
Texas accounts for more than 40% of the US’s crude oil supply, the world’s largest producer.
“As we get more reports out of Texas and Houston that things are somewhat flooded, but okay, the fear is going out of the market,” said John Kilduff, a partner at Again Capital in New York.
Major oil ports in Texas were expected to reopen on Tuesday, with some facilities ramping up production again.
Several refineries, such as Marathon Petroleum (NYSE:), were preparing to restart their refining units. [REF/OUT]
Oil investors also had mixed reactions to comments from Federal Reserve Chairman Jerome Powell, who told a congressional hearing on Tuesday that the economy was no longer overheated and that the labor market had eased.
Despite hinting that a rate cut may be on the way, oil prices fell further after the comments as a weakening economy could hamper demand for crude.
“The comments cut both ways,” Kilduff said.
Market participants are also monitoring the situation in the Middle East. On Monday, oil prices fell 1% on hopes that a possible ceasefire in Gaza could ease concerns about disruption to global crude supplies.
Senior US officials were in Egypt for talks on Monday, but gaps remained between the two sides, the White House said, and Hamas said a new Israeli attack on Gaza threatened a potential deal.
“Crude oil futures fell early on Tuesday after a second straight session of losses indicated an overdue decline from a nine-week high,” said Vandana Hari, founder of oil market analytics firm Vanda (NASDAQ:) Insights.
