New Telegraph

Ida: Global oil prices to rise over next few months

Assistant manager of Private Equity at Proven Management, Julian Morrison, has cautioned that oil prices will likely rise further over the next few months due to several factors now at play.


He was speaking on Taking Stock with Kalilah Reynolds recently against the background of oil prices recording their biggest weekly gains in a year recently, rising some two per cent as energy firms began shutting US production in the Gulf of Mexico ahead of Hurricane Ida. Morrison said the impact of the hurricane in the US will likely contribute to a temporary surge in the rates.


“We noticed that Hurricane Ida passed Jamaica and hit Louisana and disrupted some activities as it relates to oil production plants and that will cause a temporary supply disruption and also cause some spike in energy prices. That might be more temporal and we might see some correction here but in terms of a trend we’re likely to see an up trend gradually in the next couple of quarters,” said Morrison.


According to a Reuters’ report, Hurricane Ida shut about 80 per cent of the Gulf of Mexico’s oil and gas output. Projections are that oil refineries in Louisiana could take weeks to restart, which will increase the demand for crude oil.


Offshore facilities will also be challenged in offsetting the demand due to damage to key support facilities. Meanwhile, Morrison said an uptick in air travel will also influence a jolt in oil prices as more airlines take advantage of the recovering air traffic.


“Airline fleets consume copious amounts of energy and that is a supporting factor of higher energy prices,” he said. He also reasoned that uncertainties with the pandemic and sustained tension in the Middle East are also likely to influence an upward movement in oil prices over the medium term.



He said the emergence of new COVID-19 variants continue to threaten all industries including the oil and gas sector as they continue to keep a hold on economic activity than most would have originally anticipated.

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