WTI drops from two-month high on Storm Beryl fears

West Texas Intermediate (WTI) futures in NYMEX extend its correction to near $82.20 in Monday’s Asian trading after posting a two-month high near $84.00 on Thursday.

The crude oil price came under pressure as investors worry about Storm Berly, which could disrupt US energy supplies.

Should the tropical storm turn into a Category Two hurricane, a temporary halt could be seen on crude and liquefied natural gas exports, motor fuel deliveries and oil shipments to refineries.

For precautionary purposes, the ports of Houston, Corpus Christi, Galveston, Texas City and Freeport remained close on Sunday.

Meanwhile, oil demand worries have eased significantly as a rate cut move by the Federal Reserve in its September meeting appears to be a done deal.

The CME FedWatch tool shows that the probability for the Fed reducing interest rates from current levels in September has increased to 75.8% from 64% a week ago.

The expectations for the Fed to begin cutting rates from September improved after the non-farm payrolls (NFP) report for June showed that the strength in the US labour market is easing.

The report showed that wage growth softened expectedly, the Unemployment Rate increased and payrolls were higher than expectations, but lower from downwardly revised May figures.

(Source: OANDA)