Oil prices were little changed on Tuesday after a hurricane that hit a key U.S. oil-producing hub in Texas caused less damage than markets had expected, easing concerns over supply disruption.
Brent futures rose 4 cents to $85.79 a barrel by 0622 GMT, while U.S. West Texas Intermediate (WTI) crude climbed 2 cents to $82.35.
Although oil refining activity slowed and some production sites were evacuated, major refineries along the U.S. Gulf Coast appeared to see minimal impact from Hurricane Beryl, which weakened into a tropical storm after hitting the Texas coast.
“Early indications suggest that most energy infrastructure has come through unscathed,” said ING analysts Warren Patterson and Ewa Manthey in a client note, adding that price action in crude oil and refined fuel markets reflect little concern on supply disruption from the hurricane.
That eased market worries about the risk of supply disruption in Texas, where 40% of U.S. crude oil is produced.
Major oil-shipping ports around Corpus Christi, Galveston and Houston had been shut ahead of the storm. The Corpus Christi Ship Channel reopened on Monday and the Port of Houston was projected to resume operations on Tuesday afternoon.
Several key refiners such as Marathon Petroleum were also preparing to restart their refining units.
Market participants are also keeping an eye on the situation in the Middle East for more trading cues. Oil prices settled down 1% on Monday amid hopes a possible ceasefire deal in Gaza could reduce worries about global crude supply disruption.
Senior U.S. officials were in Egypt for talks on Monday, but gaps remained between the two sides, the White House said, and Hamas said a new Israeli push into Gaza threatened the potential agreement.
Markets were also waiting for the release of key U.S. inflation data, with Federal Reserve Chair Powell set to appear before Congress on Tuesday and Wednesday, as investors wagered a slew of soft labour market data has greatly increased the chance of an interest rate cut in September to about 80%.
“With a recent run in U.S. economic data raising bets for a September rate cut, any validation from upcoming inflation progress may help to support the broader risk environment, which may offer some room for oil prices to stabilise on a more favourable demand outlook,” IG market strategist Yeap Jun Rong said in an email.
Robust liftings of Saudi crude from Asian buyers on a contractual basis also provided market support, with August exports to China to rise for the first time in four months.