Oil edged lower after touching a two-month high last week as a recent rally cooled, with traders tracking the impact of Hurricane Beryl’s landfall in Texas.
Brent dipped near US$86 a barrel after a strong run of gains abated. Beryl, once again a hurricane, made came ashore early Monday in Texas, with oil companies adjusting operations and closing the port of Houston.
In addition to the storm in the U.S. Gulf, wildfires in Canada have started to menace output.
Oil touched the highest level since late-April last week, with money managers increasing their net-long positions on Brent for a fourth week, on expectations for higher demand and lower stockpiles over the summer months. Still, the rally has faced some resistance from signs of weakness in China. The push and pull has limited the number of big moves in prices and sent a gauge of volatility to the lowest level since 2019.
“A much-anticipated move of Brent past $90 is going to be contingent on weather risk and a confirmation of a strong seasonal uplift in gasoline demand,” said Harry Tchilinguirian, group head of research at Onyx Capital Group. “If either does not materialize, the market is more likely to consolidate rather than race higher.”
Traders are in line for a slew of reports this week that will shed light on global crude balances. The Organization of Petroleum Exporting Countries — which has been choking off output to bolster prices — delivers its monthly outlook, as does the International Energy Agency. In addition, there’ll be a snapshot from the U.S. Energy Information Administration.
Prices:
- Brent for September settlement was 0.4 per cent lower at $86.18 a barrel at 8:50 a.m. in New York.
- WTI for August delivery fell 0.6 per cent to $82.70 a barrel.
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