Investing.com– Oil prices settled lower Monday as traders weighed up fresh talks for over a Gaza ceasefire deal and the potential impact of tropical storm Beryl on oil production in the Gulf of Mexico.
At 14:30 (18:30 GMT), fell 0.51.1% to $85.62 a barrel, while dropped 1% to settle at $82.33 a barrel.
Traders weigh Gaza ceasefire deal odds, ongoing demand
Oil prices were hampered by hopes that a months-long war in Gaza may soon end as talks over a U.S. ceasefire plan are underway and being mediated by Qatar and Egypt.
A ceasefire would potentially see a risk premium being removed from the crude market.
Still on the demand side, bets on summer demand propping up oil prices remain front and center amid expectations that U.S. travel demand hit record highs during the Independence Day holiday last week.
“US road travel remains relatively strong and helped push implied gasoline demand on a four-week basis up for the first time this year. US air traffic hit a record high on 23 June,” ANZ Research said in a recent note.
As well as summer demand, recent gains in oil prices have also been driven by concerns over weather-related supply disruptions.
Tropical storm Beryl approaches Texas
The largest ports in Texas have closed operations and blocked traffic over the weekend to prepare for tropical storm Beyl, which is set to strengthen back into a hurricane before making landfall.
The storm is expected to pass through the biggest oil exporting regions in the state, with port closures presenting potential delays in oil shipments.
Initial expectations had been for Beryl to have a negligible impact on production. But the storm unexpectedly remained strong after leaving a trail of devastation through Jamaica.
The Gulf of Mexico is a key oil producing region for North America, and faces production disruptions every year during the summer storm season.
Exxon Mobil (NYSE:) to receive earnings boost from crude
Exxon Mobil said on Monday changes in oil prices would increase the company’s second-quarter upstream earnings by $300 million to $700 million compared with the first quarter.
The oil major would be reporting its first earnings after closing the acquisition of Pioneer Natural Resources for $60 billion, with the combined operations making it the largest oil producer in the Permian basin.
Exxon, however, said it expects changes in gas prices to decrease its quarterly upstream earnings by $300 million to $700 million compared with the first quarter.
The largest U.S. oil producer had posted $5.7 billion in upstream earnings for the first quarter ended March 31.
(Peter Nurse, Ambar Warrick contributed to this article.)