The prices of the Petroleum Oil prices fell on Tuesday after hitting two-month highs, despite expectations of increased demand during the summer holiday season and after concerns about possible supply disruptions caused by Hurricane Beryl in the Caribbean Sea.
Crude oil futures Brent crude oil fell 36 cents, or 0.42%, to $86.24 a barrel. Meanwhile, crude oil United States West Texas Intermediate (WTI) closed at $82.81 a barrel, down 0.68%. Both benchmarks rose by nearly 2% in the previous session.
After new forecasts came out on Monday, markets seemed less anxious about potential supply difficulties, he said. Phil Flynn, analyst at Price Futures Group.
“The markets realized that Beryl will not cause the cessation of large volumes of oil production “offshore platforms,” Flynn said, admitting: “We may see some closures, but they will have minimal impact.”
Demand will increase due to the holidays
Gasoline demand is expected to USA increase as Independence Day travel picks up this week. The American Automobile Association forecast that holiday travel will be 5.2% higher than in 2023, with car trips up 4.8%.
The rise in the risk premium linked to tensions in middle East and signs of moderation in inflation in USA, which revived hopes of interest rate cuts, also supported oil prices.
Markets are also looking at the potential disruption to US offshore refining and production as powerful Hurricane Beryl makes landfall in the Caribbean.
“A dangerous hurricane in the Caribbean Sea is expected to hit Mexico, “raising concerns about the supply side of the equation,” said Charalampos Pissouros of brokerage XM, adding that recent US data supports the market view that the Federal Reserve is likely to approve two quarter-point rate cuts this year.
The decline in crude oil exports from the OPEC and Russia, Just as refineries are preparing for the summer peak, it is contributing to a tighter than expected market, and prices are reacting accordingly, said Claudio Galimberti of Rystad Energy.
Source: Ambito
