Ashley Kelty, oil & gas research analyst at Cantor Fitzgerald Europe, comments on the impact of Hurricane Florence on oil prices.
“The impact of widespread disruption, and thence fuel shortages, in the US following the projected devastation from Hurricane Florence should push WTI and Brent to multi-year highs towards the end of the week.
“With the US likely to see larger than usual draws in crude inventories during the coming weeks, demand for Brent cargoes should grow, further supporting prices. We would anticipate that prices will remain towards the top of the US$70 - 80 range over the remainder of 2018, as Iranian output is impacted by US sanctions and Venezuelan output continues to fall – increased output from Saudi Arabia and Russia will partially stem the decline in the short term, but longer term output may be hard to increase due to the limited spare capacity in the OPEC system.
“However, whether this increase translates to a longer term one is harder to predict, given the rising US-Sino trade tensions which are likely to impact global oil demand over the longer term."