WTI Futures Dip to $82.20 Amid Storm Berly Concerns and Lease Uncertainty

8 July 2024

    West Texas Intermediate (WTI) futures in NYMEX extend their 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 closed on Sunday.

    Federal Reserve Rate Cut Expectations

    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 labor 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.

    Lease Definition and Meaning

    In the context of business and finance, understanding what is a lease is crucial. A lease is a contractual agreement where one party, known as the lessor, grants another party, known as the lessee, the right to use an asset for a specified period in exchange for periodic payments. The lease meaning extends beyond just real estate; it can include equipment, vehicles, and other assets essential for business operations.

    The lease definition encompasses various types of leases such as operating leases and finance leases. An operating lease allows the lessee to use an asset without ownership transfer, while a finance lease is more akin to a purchase agreement where ownership may eventually transfer to the lessee.

    Understanding what is a lease and its implications can help businesses make informed decisions about asset management and financial planning. Whether it’s navigating through market fluctuations or preparing for potential disruptions like Storm Berly, having a clear grasp of leasing terms can provide stability and predictability in uncertain times.


    How did Storm Berly impact WTI futures prices on NYMEX?

    Storm Berly significantly impacted WTI futures prices on NYMEX by causing a sharp spike due to concerns over potential supply disruptions. The storms threat to key oil-producing regions led traders to anticipate reduced output, driving prices higher as they hedged against possible shortages.

    Can Storm Berlys escalation disrupt WTI crude oil prices further?

    Send a request and get a free consultation:
    Thanks for the apply!
    We will get back to you within 1 business day
    In the meantime, you can get a free consultation from our AI assistant:​