Crude Oil Prices Drop Due To Storm Supply Disruption In Mexico

Crude Oil (Photo: Unsplash)

JAKARTA - crude oil prices fell in trading Friday, July 5. This is due to predictions that the ceasefire agreement in Gaza was less intense than demand for fuel in the summer, as well as supply disruptions due to storms in the Gulf of Mexico.

According to Reuters, Brent crude prices fell 89 cents, or 1.02 percent, to 86.54 dollars a barrel after hitting its highest level since April. Meanwhile, the price of US West Texas Intermediate (WTI) crude ended down 72 cents, or 0.9 percent, to 83.16 dollars a barrel.

Within a week, Brent prices rose 0.4 percent. Meanwhile, the price of WTI rose 2.1 percent.

Seeing the existing sentiment from Gaza, the Israeli Mossad leadership has returned from Doha after a preliminary meeting with the mediators to reach the ceasefire and an agreement to release the hostages. The negotiations will also resume next week.

"Obviously the breakthrough there will help calm things down," said analyst at Again Capital John Kilduff.

The easing of conflicts in the Middle East will reduce the risk of oil discharge premiums from the region and burden oil prices.

The US Energy Information Agency (EIA), on Wednesday, reported a decline in inventories of 12.2 million barrels much larger than expected last week, compared with analyst expectations that expect a drop of 700.000 barrels.

On the supply side, Hurricane Beryl, Category 2 storm, hit Mexico, after killing at least 11 people in the Caribbean, destroying buildings and power lines on several Caribbean islands.

Mexico's main oil supply is expected not to be affected by this storm, but oil projects in US waters in the north may be disrupted if the storm continues as expected.