Oil Prices Close Lower on Fear of Market Impact from Hurricane Beryl
Gasoline demand in the United States is expected to rise due to estimated travel volumes for Independence Day this week.
Both Brent crude and U.S. crude closed lower on Tuesday as fears of supply disruption dissipated with Hurricane Beryl passing through the Caribbean and weakening slightly in the afternoon.
Brent crude futures fell 36 cents, or 0.42%, to $86.24 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) settled at $82.81 per barrel, down 0.68 percent.
Earlier in the session, WTI rose $1 to $84.80 per barrel amid concerns that Beryl could have a broader impact on offshore oil production in the Gulf of Mexico, coinciding with increased U.S. demand for automobile fuels.
Both benchmarks had gained around 2% in the previous session.
However, after new forecasts were released on Monday, markets appeared less concerned about potential supply disruptions. It became evident that Beryl would not lead to major shutdowns of offshore oil production platforms.
On Tuesday, Hurricane Beryl was heading towards Jamaica as a powerful Category 5 storm after making landfall in smaller islands of the eastern Caribbean, causing power outages and flooding. Reports indicated two fatalities.
U.S. meteorologists forecasted Beryl to weaken to a Category 4 later on Tuesday, but it is expected to remain a strong hurricane, likely bringing 4 to 12 inches of rain to Jamaica and southwestern Haiti through late Wednesday.
U.S. gasoline demand is expected to increase due to the high volume of travel estimated for Independence Day this week. The American Automobile Association (AAA) forecasted a 5.2% increase in holiday travel compared to 2023, with a 4.8% rise in car travel.
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