By Colleen Howe and Trixie Yap
(Reuters) – Oil prices were little changed on Tuesday after a hurricane that hit a major U.S. oil production hub in Texas caused less damage than markets had expected, easing concerns about supply disruptions.
Brent crude futures rose four cents to $85.79 a barrel by 0622 GMT, while U.S. West Texas Intermediate crude rose two cents to $82.35.
Despite slowing oil refining activity and evacuating some production sites, major refineries along the U.S. Gulf Coast appeared to see little impact from Hurricane Beryl, which weakened to a tropical storm after hitting the Texas coast.
“Initial indications are that most of the energy infrastructure has escaped damage,” ING analysts Warren Patterson and Ewa Manthey said in a note to clients, adding that price moves in crude oil and refined fuel markets reflect little concern about supply disruptions due to the hurricane.
This helped ease market concerns about the risk of supply disruption in Texas, where 40% of oil is produced.
Major oil shipping ports around Corpus Christi, Galveston and Houston were closed ahead of the storm. The Corpus Christi shipping channel reopened Monday and the Port of Houston is expected to resume operations Tuesday afternoon.
Several major refiners, such as Marathon Petroleum (NYSE:) were also preparing to restart their refining units. (REF/OUT)
Market participants are also watching the situation in the Middle East for further trade signals. Oil prices settled down 1% on Monday amid hopes that a possible ceasefire in Gaza will ease concerns about disruption to global crude supplies.
The White House said senior US officials were in Egypt for talks on Monday, but gaps remained between the two sides, and Hamas said a new Israeli offensive on Gaza threatened a potential deal.
Markets are also awaiting key US inflation data, with Federal Reserve Chairman Jerome Powell due to appear before Congress on Tuesday and Wednesday, as investors have bet that a string of weak labour market data has significantly increased the chances of a September interest rate cut to around 80%.
“With the recent uptick in US economic data raising bets for a September rate cut, any confirmation of the upcoming progress in inflation could help support the broader risk environment, which could provide some room for oil prices to stabilize amid a more positive demand outlook,” IG market strategist Yip Jun Rong said in an email.
Strong shipments of Saudi crude from Asian buyers on a contractual basis also supported the market, with August exports to China rising for the first time in four months.