Beryl’s Impact on Oil Prices

In the week of Hurricane Beryl's arrival, oil prices saw an increase, highlighting ongoing concerns about the hurricane season's impact on energy markets. The intensity of Hurricane Beryl, marking the start of the hurricane season, has raised alarms about potential disruptions from future storms in the coming months.

According to experts, the elevated water temperatures that fueled Beryl are cause for concern regarding upcoming hurricanes, as hurricane season has just started.

Oil prices eased on Tuesday after Hurricane Beryl, which hit a key US oil hub in Texas, caused less damage than anticipated, reducing fears of significant supply disruptions, Reuters reported. Despite the temporary slowdown in refining activity and evacuations at some production centers, major refineries on the US Gulf Coast experienced minimal impact as the hurricane weakened into a tropical storm upon hitting Texas.

The risk posed by Hurricane Beryl led to temporary halts in oil production and energy operations in parts of southeastern Mexico. Although the immediate threat diminished, this event coincided with the largest drop in US oil reserves in almost a year, highlighting ongoing caution in the market regarding oil prices.

A continuous sense of lower demand from Asia has significantly contributed to a gradual but low rise in oil prices. According to El Financiero, moderate oil prices and sustained low demand have prompted Saudi Aramco to reduce its crude oil prices for the Asian region for the second consecutive month.

Geopolitical risks also play a crucial role, with factors such as the French elections and concerns about US President Joe Biden's performance in debates with Donald Trump adding to market uncertainty. Additionally, the Middle East remains volatile, with progress in truce negotiations between Hamas and Israel juxtaposed against escalating conflicts with Iran-backed Hezbollah.