Oil prices fell after Hurricane Beryl, which hit a major oil production center in the US state of Texas, caused less damage than expected, calming concerns about supply disruptions.
Brent crude futures were down 57 cents, or 0.66%, at $85.18 a barrel at the time of writing, while U.S. West Texas Intermediate crude was down 61 cents, or 0.74%, at $81.72.
Despite the slowdown in oil refining activity and the evacuation of some production sites, major refineries on the US Gulf Coast appeared to see little impact from Hurricane Beryl, which weakened to a tropical storm after reaching the Texas coast.
“Early indications are that most energy infrastructure is unaffected,” ING analysts Warren Patterson and Ewa Manthey said in a note to clients, adding that price action in crude oil and refined fuel markets reflects little concern about supply disruptions due to the hurricane.
This eased market concerns about the risk of supply disruption in Texas, where 40% of US crude oil is produced.
Major oil shipping ports around Corpus Christi, Galveston and Houston were closed ahead of the storm, with the Corpus Christi Ship Channel reopening yesterday and the Port of Houston expected to resume operations Tuesday afternoon.
Market participants are monitoring the situation in the Middle East for further signals that could affect the energy sector, and oil prices fell 1% yesterday amid hopes that a possible ceasefire agreement in the Gaza Strip will help ease concerns about disruption to global crude supplies.
The White House said US officials visited Egypt for talks on a ceasefire in Gaza yesterday, but gaps remained between the two sides. The Islamic Resistance Movement “Hamas” said a new Israeli incursion into Gaza threatened the possible agreement.
Markets are also awaiting key US inflation data, as well as Federal Reserve Chairman Jerome Powell’s appearance before Congress today and tomorrow, with investors betting that data showing a slowdown in the labor market significantly increases the chances of an interest rate cut in September.
gold
In the markets, gold prices rose today while the dollar declined as investors awaited Powell’s testimony and inflation data for June to assess the US Federal Reserve’s next move.
Spot gold rose 0.26% to $2,365.14 per ounce at the time of reporting, while US gold futures rose 0.33% to $2,371.30.
The dollar is hovering near multi-week lows against a basket of major currencies, making the yellow metal cheaper for holders of other currencies.
Friday’s jobs report showed the U.S. unemployment rate rose to 4.1%, and markets are pricing in a 77% chance of a rate cut in September and another by December, according to CME Group’s FedWatch service.
Non-yielding gold is gaining traction as interest rates fall. Market participants are also awaiting the US consumer price index and producer price index data for June, due on Thursday and Friday respectively.
Dollar
The dollar rose after hovering near its lowest levels in about a month against a group of major currencies as the fallout from the jobs report continued.
The euro held steady after sharp swings yesterday, after parliamentary elections in France ended without a clear majority for any of the competing coalitions, which could lead to a state of political deadlock despite its potential positive impact on financial concerns linked to a clear victory for the left or far right.
The dollar index, which measures the performance of the US currency against the euro, the pound sterling, the yen and three other major currencies, settled at 105.04 points.
The index fell 0.9% last week, hurt by Friday’s jobs report, which boosted bets that the Federal Reserve will start cutting interest rates soon.
The Federal Reserve chairman is scheduled to testify before Congress for two days, beginning in the Senate later Tuesday and then in the House of Representatives on Wednesday.
The euro was steady at $1.0821 at the time of writing, down from a nearly four-week high of $1.0845 hit on Monday.
The single European currency also fell on the same day to $1.07915.
