Oil Prices Slide As Beryl Fizzles, While Hopes Rise For Gaza Ceasefire Talks

Meanwhile, global demand remains unclear: File Image/Pixabay

Hedges placed ahead of Hurricane Beryl's landfall in the U.S. were unwound on Monday as the storm caused relatively little damage to oil facilities; crude trading was also affected by hopes of a ceasefire in Gaza.

Brent settled down 79 cents at $85.75 per barrel, while West Texas Intermediate settled down 83 cents at $82.33.

Phil Flynn, senior market analyst at Price Futures Group Inc., said of Beryl's rapidly declining severity, "Oil and products are sliding on the storm as some of the worst-case scenarios of Hurricane Beryl thankfully won't come to be."

Andrew Lipow, president of Lipow Oil Associates, added, "I don't foresee this storm affecting either supply or price to any significant degree; the consumer will get their gasoline….most people will not even notice."

As Beryl pounded Texas with strong winds and heavy rain but no reported oil infrastructure damage, talks over a U.S. ceasefire plan to end the war in Gaza got under way in the Middle East, mediated by Qatar and Egypt.

It's unclear to what degree analysts place faith in a positive outcome, considering Israel has repeatedly vowed to continue fighting until all of Hamas has been wiped out.

Monday also saw the usual mixed messages about the health of the global crude market: in India, fuel consumption rose by 2.6 percent year-on-year to 19.99 million metric tons in June, but in Asia crude imports in the first half of 2024 declined compared to the same time period in 2023, and exports in Germany in May fell more than expected due to weak demand from China, the U.S. and European countries.

For its part, Bloomberg pointed out that "Crude remains solidly higher year-to-date aided by OPEC+ supply cuts that have tightened the market, as well as expectations that the Fed is poised to lower interest rates," and the news agency added that Federal Reserve chair Jerome Powell will deliver the central bank's semi-annual report on U.S. monetary policy to Washington later Tuesday.

In other oil news on Monday, Devon Energy announced plans to acquire Grayson Mill Energy's Williston Basin business in a cash and stock deal valued at $5-billion, consisting of $3.25 billion in cash and $1.75 billion in stock.

Devon expects to realize up to $50 million in average annual cash flow savings from marketing synergies and operating efficiencies due to the addition of 307,000 acres to its portfolio; the acquisition will also significantly move Devon from the basin's 10th largest producer to the fourth, according to research firm Enverus.