Oil prices dipped on Wednesday as the impact of Hurricane Beryl dissipated and inflation data highlighted stubbornly weak consumer demand in China, the world’s top crude importer.
Brent crude oil, against which the Nigerian oil is priced, dropped by 58 cents, or 0.69% to close at $84.08 a barrel following a 1.3% decline in the previous session.
U.S. West Texas Intermediate (WTI) crude also fell 48 cents, or 0.59% to $80.93 a barrel after a 1.1% drop the day before.
Both contracts have experienced a roughly 3% decline over the past three sessions. This trend is attributed to signs that the Texas energy industry weathered Hurricane Beryl with minimal lasting damage after the storm hit on Monday.
By Tuesday, oil and gas companies had restarted some operations, several ports had reopened, and most production facilities were ramping up output.
However, some facilities did sustain damage, and power had not been fully restored.
“Hurricane Beryl blowing over seems to be the biggest driver for the time being and an opportunity for traders to lock in some profits after a bullish run over the last two weeks,” said Suvro Sarkar, energy sector team lead at DBS Bank.
In addition to the hurricane’s diminishing impact, concerns over demand in China also weighed on oil prices. Consumer prices in China grew for a fifth consecutive month in June but fell short of expectations, while producer price deflation persisted.
“Expectations for easing tensions in the Middle East and weaker-than-expected CPI data for June from China pressed on oil prices today,” said independent market analyst Tina Teng.
In the Middle East, negotiations to secure a ceasefire in the Gaza conflict are set to resume in Doha, with intelligence chiefs from Egypt, the United States, and Israel in attendance.
Despite these factors, oil prices were somewhat supported by comments from U.S. Federal Reserve Chair Jerome Powell, suggesting a stronger case for interest rate cuts, which could spur economic growth and increase oil consumption.
Following Powell’s remarks, investors have continued to bet on a nearly 70% chance that the Fed will cut rates in September.
“Powell’s remarks to the Senate affirmed the improvement in data through the June quarter, while maintaining that more good data would boost confidence in the inflation outlook,” ANZ analysts noted in a Wednesday report.
Also, U.S. crude oil and gasoline inventories fell by 1.923 million barrels and 2.954 million barrels, respectively, according to market sources citing American Petroleum Institute (API) figures on Tuesday.
This decline indicates steady summer fuel demand, contributing to the rebound after days of price declines. Official data from the U.S. Energy Information Administration (EIA) is set to be released at 1630 GMT.
“Today’s U.S. inventory data will be keenly watched if drawdowns continue after last week’s massive draw,” said DBS Bank’s Sarkar.
As oil markets react to these dynamics, the interplay between hurricane recovery efforts, Chinese economic signals, and broader geopolitical developments will continue to shape crude prices in the coming weeks.
