Oil Prices Fall as US Stockpiles Drop and Hurricane Beryl Hits

Oil prices drop as US crude stockpiles hit a low and Hurricane Beryl disrupts production. Learn how these factors impact the market and future trends.

Jul 4, 2024 - 09:42
Jul 4, 2024 - 09:42
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Oil Prices Fall as US Stockpiles Drop and Hurricane Beryl Hits
Oil Prices Fall as US Stockpiles Drop and Hurricane Beryl Hits

Oil prices fell from their recent two-month high as traders looked at lower US crude stockpiles and the potential impact of Hurricane Beryl. Brent crude slipped below $87 a barrel after rising by 1.3% on Wednesday, marking its biggest gain in nearly a week. Trading volumes are expected to be low on Thursday because of a US holiday.

US crude oil inventories dropped by more than 12 million barrels last week, the largest decrease in almost a year, bringing stock levels to their lowest since March.

Hurricane Beryl is affecting US oil production. Companies like Shell Plc, BP Plc, and Exxon Mobil Corp. have evacuated some platforms in the Gulf of Mexico. The storm is expected to disrupt about 73,000 barrels of offshore oil production each day.

Since early June, oil prices have increased by more than 10%. This rise is due to reduced output from OPEC+ countries, expected higher demand during the summer, geopolitical tensions, and positive trends in the stock market. However, concerns about low demand in China, the world’s biggest importer of crude oil, have limited these gains. China's buying activity has been quieter than usual.

"Geopolitics and weather are keeping oil prices stable in the $80s for now," said analysts from Citigroup Inc., including Eric Lee. "There are signs that prices might go down based on market and demand conditions, but hurricanes remain a risk."

Experts also suggest that factors like global economic health, alternative energy sources, and environmental policies will continue to play a role in shaping oil prices. Keeping an eye on these aspects can help predict future trends in the oil market.

Also Read: Oil Prices Surge Amid Middle East Tensions and Record-Breaking Hurricane

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