(Bloomberg) -- Oil eased as the U.S. crude hub of Houston moved past the worst of storm Beryl, and traders looked ahead to U.S. Federal Reserve Chair Jerome Powell’s two-day testimony on monetary policy.
Brent slipped toward US$85 a barrel after shedding almost two per cent in the prior two sessions, while West Texas Intermediate was near $82. As storm Beryl continued its path through the U.S. mainland, recovery efforts were in progress in Texas, with some infrastructure — like the Port of Houston and the Explorer Pipeline — remaining offline. About 85 per cent of Houston lost power.
Crude remains solidly higher year-to-date, aided by OPEC+ supply cuts that have tightened the market, as well as expectations that the Fed is poised to lower interest rates. Powell will deliver the central bank’s semi-annual report on U.S. monetary policy to the Senate Banking Committee later on Tuesday, offering investors hints on the path forward for borrowing costs.
Forecasts for higher fuel consumption throughout the northern hemisphere’s summer have been supportive of prices, although slumping supertanker earnings are a reminder of ongoing concerns about Chinese consumption. Clues on the state of the market will come later Tuesday with the release of the Energy Information Administration’s Short-Term Energy Outlook.
“Both crude and liquids balances are expected to remain tight in the second half of 2024, leading to significant stock draws,” said Claudio Galimberti, Global Market Analysis Director at Rystad Energy. “Hurricane Beryl made landfall in Texas, causing extensive power outages in Houston and shipping delays. However, so far, it has had a limited impact on production and refining assets.”
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