Crude oil prices dipped earlier today but are expected to rise again due to storm Beryl’s reclassification as a hurricane. Beryl is approaching Texas and is expected to make landfall soon.
Several major ports in Texas, including Corpus Christi, Houston, Galveston, Freeport, and Texas City, shut down over the weekend in anticipation of the hurricane. These ports are crucial to the oil industry, and their closure means a temporary halt in oil exports and refinery loadings.
Gulf oil operators like Shell and Chevron have started evacuating staff from offshore platforms ahead of Beryl’s arrival. The storm has already caused significant damage in the Caribbean and is predicted to bring strong winds and flooding to the Texas coast.
The Energy Information Administration (EIA) had forecasted up to 25 named storms for this hurricane season, highlighting the increased risk of weather-related production outages in the U.S. oil and natural gas industry.
Last year, only one of 20 named storms hit land in the U.S., and none caused significant disruptions to oil and gas installations. However, this year’s season, which runs from June 1st to the end of November, may see a different scenario, with hurricanes typically affecting the Southeast and Gulf Coast.
Even if this season is weaker than predicted, storms will still impact oil prices. The extent of this impact depends on the storm’s severity and the damage it inflicts on oil and gas infrastructure. Any inventory draws reported by the EIA during the peak driving season could further reinforce this impact.