Oil Prices Watch Texas Storm as Market Holds Mostly Steady

Oil prices remained relatively stable as investors monitored potential energy supply disruptions due to Tropical Storm Beryl, which is expected to strengthen into a hurricane and make landfall on Monday. 

As of 0042 GMT, Brent crude futures edged up 11¢, or 0.1%, to $86.65 a barrel after closing down 89¢ on Friday. U.S. West Texas Intermediate crude was at $83.08 a barrel, down 8¢, after falling 72¢ in the previous session.

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The major Texas ports of Corpus Christi, Houston, Galveston, Freeport, and Texas City shut down on Sunday to brace for Tropical Storm Beryl, which could develop into a Category 2 hurricane as it makes landfall between Galveston and Corpus Christi later on Monday. These closures could temporarily halt crude and liquefied natural gas exports, oil shipments to refineries, and motor fuel deliveries from these plants.

"It looks like a storm surge and power outages are likely," said Tony Sycamore, an analyst at IG in Sydney. He added that U.S. data could show another significant weekly draw in oil inventories during the peak driving season, which would support oil prices.

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Last week, WTI gained 2.1% after the Energy Information Administration reported a decline in stockpiles for crude and refined products for the week ending June 28.

According to Baker Hughes' weekly report on Friday, the number of operating oil rigs in the U.S. remained unchanged at 479 last week, holding at its lowest level since December 2021. Sycamore also noted that hopes for interest rate cuts, spurred by U.S. data showing easing inflation and slowing job growth, were supportive of oil prices. Lower interest rates can stimulate economic activity and increase crude oil demand.

Investors are also keeping an eye on the potential impacts of recent elections in the UK, France, and Iran on geopolitics and energy policies. In France, elections on Sunday resulted in a hung parliament, while in Iran, Masoud Pezeshkian, a relative moderate, was elected president, defeating a hard-line rival.