Oil slipped from a two-month high as traders assessed lower U.S. crude inventory data and the severity of Hurricane Beryl.

Brent crude traded below US$87 a barrel after rising by 1.3 per cent on Wednesday, its biggest gain in nearly a week. Volumes are likely to be thin on Thursday due to a U.S. holiday. U.S. crude inventories dropped by more than 12 million barrels last week, the most in almost a year, to the lowest since March.

Hurricane Beryl, meanwhile, is disrupting U.S. oil output, with companies including Shell Plc, BP Plc and Exxon Mobil Corp. evacuating some of their platforms in the Gulf of Mexico. Around 73,000 barrels a day of federal offshore oil production is within the projected path of the storm.

Crude has risen more than 10 per cent since early June on OPEC+ supply constraints, expectations for higher summer demand, geopolitical risks and bullishness in equity markets. Gains have been pared by concerns about demand in China, the world’s biggest crude importer, which has seen muted buying activity.

“Geopolitics and weather are keeping oil prices well supported in the $80s for now,” Citigroup Inc. analysts including Eric Lee said in a note. “There are reasons to believe that current strength can ease, based on physical market and demand signals, even though hurricanes need to be carefully watched.”

Prices:

• Brent for September settlement declined 0.7% to $86.74 a barrel at 12:52 p.m. in London
• WTI for August delivery fell 0.8% to $83.21 a barrel