Oil steadies as traders track Beryl, before OPEC and IEA reports

Oil steadied ahead of reports from OPEC and the IEA this week that will shed light on global crude balances, with traders also tracking Tropical Storm Beryl’s path as it approaches Texas.

Brent crude traded below $87 a barrel after four weeks of gains, with West Texas Intermediate above $83. The Organization of Petroleum Exporting Countries and the International Energy Agency present monthly market snapshots this week, as does the US Energy Information Administration.

Tropical Storm Beryl is expected to rapidly strengthen as it nears the Texan coast on Monday, with oil companies adjusting operations as it bears down on the state. The system was last 135 miles (217 kilometres) east-southeast of Corpus Christi and hurricane warnings are in effect.

Oil touched the highest level since late April last week as expectations for higher demand and lower stockpiles over the summer months pushed prices higher. While the rally has faced some resistance from signs of weakness in China, the largest crude importer, wider market expectations for US interest-rate cuts have helped to buoy risk assets, including commodities. Money managers increased their net-long positions on Brent for a fourth week.

Widely watched metrics point to a solid market. Brent’s prompt spread — the difference between its two nearest contracts — was 88 cents a barrel in backwardation, a bullish pattern. It was less than half that a month ago.

On the geopolitical front, reformist Masoud Pezeshkian was voted in as Iran’s president, seeking to restart talks with the US over a landmark nuclear deal. Elsewhere, a shock legislative election result in France saw the left-wing coalition winning, while in the US, pressure continues to mount for Joe Biden to quit the race for president.

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