US storm in oil

Oil prices calmed after a four-week rally as investors followed the storm in the US and uncontrollable fires in Canada.

Oil prices held above $86 a barrel after investors warned of a storm in the US and uncontrollable weather in Canada, with Brent rising more than 8 percent during gains in early June, while US crude held below $83. With oil companies adjusting their operations, Hurricane Beryl is expected to strengthen rapidly as it approaches the Texas coast. Forest fires in Alberta also threaten supply.

Warren Patterson, head of commodity strategy at ING Groep NV in Singapore, said that while Beryl “puts some offshore oil and gas production at risk, concern about the storm making landfall could have a potential impact on refinery infrastructure, with prolonged refinery outages likely to mean lower crude and higher refined products.”

Oil prices reached their highest level since late April last week as expectations of higher summer demand and declining inventories pushed prices higher. Market expectations of a US interest rate cut have helped lift risk assets, including commodities, although the rise has faced some resistance amid signs of weakness in China, the biggest crude importer. Money managers increased their net long position on Brent for the fourth week in a row, cooling after a four-week rally as markets followed the gains.

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