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WTI corrects from two-month high near $84.00 amid caution due to Beryl Storm

  • WTI price corrects from $84.00 due to uncertainty over the impact of Tropical Storm Beryl.
  • Several U.S. ports were closed Sunday as a precaution against Storm Beryl.
  • The prospects for Fed rate cuts in September have risen significantly.

West Texas Intermediate (WTI) futures on NYMEX extend their correction to near $82.20 in the Asian session on Monday after hitting a fresh two-month high near $84.00 on Thursday. Oil prices are under pressure as investors worry about Storm Beryl, which could disrupt US energy supplies.

If Tropical Storm Beryl strengthens into a Category 2 hurricane, it could see a temporary halt in crude oil and liquefied natural gas exports, motor fuel deliveries, and oil shipments to refineries.

Out of an abundance of caution, the ports of Houston, Corpus Christi, Galveston, Texas City and Freeport remained closed Sunday.

Meanwhile, concerns over oil demand have eased significantly as a rate-cutting move by the Federal Reserve (Fed) at its September meeting appears to be a fait accompli. The CME FedWatch tool shows that the probability of the Fed cutting interest rates from their current levels in September has risen to 75.8% from 64% recorded a week ago.

Expectations that the Fed will begin cutting interest rates as early as September improved after the US June Nonfarm Payrolls (NFP) report showed that the strength of the US labour market is waning. The report showed that wage growth softened as expected, the unemployment rate rose and payrolls were higher than expected but lower than the downwardly revised figures for May.

Brent Crude FAQs


Brent crude oil is a type of crude oil found in the North Sea that is used as a benchmark for international oil prices. It is considered “light” and “sweet” due to its high gravity and low sulfur content, making it easy to refine into gasoline and other high-value products. Brent crude oil serves as a benchmark price for approximately two-thirds of the world’s internationally traded oil supplies. Its popularity is based on its availability and stability: the North Sea region has a well-established infrastructure for oil production and transportation, ensuring a reliable and steady supply.


Like all assets, supply and demand are the key drivers of the Brent crude oil price. As such, global growth can be a driver of higher demand and vice versa for weak global growth. Political instability, wars and sanctions can disrupt supply and affect prices. Decisions by OPEC, a group of major oil producing countries, are another key driver of price. The value of the US Dollar influences the Brent crude oil price as oil is predominantly traded in US Dollars, so a weaker US Dollar can make oil more affordable and vice versa.


Weekly oil inventory reports released by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of Brent crude oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories, it may indicate an increase in demand, which pushes up the price of oil. Higher inventories may reflect an increase in supply, which pushes down prices. The API report is released every Tuesday, and the EIA report the following day. Their results are usually similar, within 1% of each other 75% of the time. The EIA data is considered more reliable since it is a government agency.


OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing nations that collectively decide production quotas for member countries at semi-annual meetings. Their decisions often affect Brent crude oil prices. When OPEC decides to reduce quotas, it can restrict supply, driving up oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten additional non-OPEC members, the most notable of which is Russia.

Source: Fx Street

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