Investing.com — Oil prices were flat in Asian markets on Monday as traders closely monitored the impact of Tropical Storm Beryl on crude production in the Gulf of Mexico, but also remained focused on further signs of robust summer demand.
Oil prices have recorded four straight weeks of big gains on hopes of stronger summer demand, with the latest gains also being driven by concerns about weather-related supply disruptions.
However, recent gains in oil prices were somewhat tempered by concerns about slowing economic growth and weakening demand in China, the largest importer.
Crude oil futures expiring in September rose 0.2% to $86.67 a barrel and were flat at $82.28 a barrel as of 20:21 ET (00:21 GMT), both contracts hovering near their two-month highs.
Tropical Storm Beryl approaches Texas
Major ports in Texas suspended operations and closed traffic over the weekend in preparation for Tropical Storm Vail, which is expected to again strengthen into a hurricane before making landfall, according to media reports.
The storm is expected to pass through the state’s largest oil-exporting region, which could cause delays in oil shipments due to port closures.
Initial predictions were that Beryl would have little impact on production, but the storm unexpectedly held on after leaving devastating damage in Jamaica.
The Gulf of Mexico is a major oil-producing region in North America and faces production disruptions every summer during the storm season.
Any disruption to oil production would increase the likelihood of tighter oil supplies, which would be favorable for prices.
Travel demand and geopolitical risks support oil prices
Demand for U.S. travel is believed to have hit a record high over last week’s Independence Day holiday, and the big drop there has also boosted hopes of stronger summer demand, broadly supporting oil prices.
Moreover, ongoing geopolitical unrest in the Middle East is keeping traders priced in a risk premium for oil. Tensions between Israel and Lebanon’s Hezbollah show little sign of easing, keeping markets on edge over an all-out war in the region that would disrupt oil production.
