By Colleen Howe and Trixie Yap
(Reuters) – Oil prices were little changed on Tuesday after a hurricane that hit a key U.S. oil production hub in Texas caused less damage than markets had expected, easing concerns about supply disruption.
Futures rose 4 cents to $85.79 a barrel by 0622 GMT, while U.S. West Texas Intermediate (WTI) crude was up 2 cents at $82.35.
Although oil refining activity slowed and some production sites were evacuated, major refineries along the U.S. Gulf Coast appeared to suffer minimal impact from Hurricane Beryl, which weakened to a tropical storm after hitting the Texas coast.
“Early indications suggest that most of the energy infrastructure has emerged unscathed,” ING analysts Warren Patterson and Ewa Manthey said in a note to clients, adding that price action in crude oil and refined fuel markets reflects little concern about supply disruption caused by the hurricane.
That eased 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 had been closed before the storm. The Corpus Christi Ship Channel reopened Monday and the Port of Houston is expected to resume operations Tuesday afternoon.
Several key refineries such as Marathon Petroleum (NYSE:) were also preparing to restart their refining units. [REF/OUT]
Market participants are also keeping an eye on the situation in the Middle East for further trade signals. Oil prices fell 1% on Monday amid hopes that a possible ceasefire deal in Gaza could ease concerns about disruption to global crude supplies.
Senior US officials were in Egypt for talks on Monday but gaps remained between the two sides, the White House said, with Hamas saying a new Israeli advance in Gaza threatened a possible deal.
Markets were also awaiting the release of key US inflation data, with Federal Reserve Chair Powell appearing before Congress on Tuesday and Wednesday, as investors bet that a string of weak labour market data has greatly increased the chance of a September interest rate cut to around 80%.
“With a recent slew of US economic data raising bets for a rate cut in September, any validation of inflation’s upcoming progress may help support the broader risk environment, which may offer some scope for oil prices to stabilise on a more favourable demand outlook,” IG market strategist Yeap Jun Rong said in an email.
Strong supplies of Saudi crude from Asian buyers on a contractual basis also provided support to the market, with August exports to China rising for the first time in four months.