Oil Prices Slide as Hurricane Beryl Threatens US Demand, Ceasefire Deal Advances

By Adedapo Adesanya 

Oil prices fell around 1 per cent on Monday as Hurricane Beryl shut refineries in the United States and ports along the Gulf of Mexico, and on hopes a possible ceasefire deal in Gaza could reduce worries about global crude supply disruptions.

Brent futures fell by 79 cents or 0.9 per cent to settle at $85.75 a barrel and the US West Texas Intermediate (WTI) crude depreciated by 83 cents or 1.0 per cent to trade at $82.33 per barrel.

Hurricane Beryl impacted Texas with high winds and heavy rain as it moved inland. Of all the states in the US, Texas generates the most natural gas and oil.

Oil ports shuttered, hundreds of flights were cancelled, and over 2.7 million households and businesses lost electricity.

This is not the only country facing weather challenges as petrol scarcity hooked Nigeria, Africa’s largest oil producer. The Nigerian National Petroleum Company (NNPC) Limited said weather disrupted the supply of petrol on Monday.

Meanwhile, on Monday, Middle East mediators Qatar and Egypt are in the midst of negotiations on a US-led ceasefire proposal to end the nine-month-old conflict in Gaza.

Elsewhere, investors were watching for how elections in the UK, France and Iran over the past week would affect geopolitics and energy policies.

Following Sunday’s election in France, which prevented the extreme right from gaining power but resulted in a hung parliament, the French left declared its desire to lead the government but acknowledged on Monday that negotiations would be difficult and take time.

President Emmanuel Macron had called a quick election, and many of France’s friends sighed with pleasure when Marine Le Pen’s National Rally (RN) lost.

In the US, President Joe Biden said that he would not give up on his re-election campaign amid concerns that his party would lose both the White House and Congress in the next US election on November 5.

Crude oil imports into Asia decreased in the first half of 2024 compared to the same time the previous year, mostly as a result of fewer arrivals in China, the largest oil importer in the world.

The use of gasoline (petrol) increased by 2.6 per cent annually to 19.99 million metric tonnes in June from a year earlier in India, the third-largest oil consumer in the world.

May export figures in Germany were lower than anticipated because of a decline in demand from China, the US, and other European nations.

The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have already extended most of its oil output cuts into 2025. Those output cuts have led analysts to forecast supply deficits in the third quarter as transportation and demand for air-conditioning during the summer eat into fuel stockpiles.