This morning crude was trading at a near three-year high as prices continued to rally following the hurricanes in the Gulf of Mexico that disrupted fuel supply this month. Today crude opened up at $74.19, trading as high as $75.56. Diesel opened the morning at $2.2693, and gasoline opened at $2.1874.
In the wake of two disruptive storms that have been estimated to have caused over $40 billion in damages, oil prices have risen over the past few weeks. Today’s peak of trading near a three-year high reinforces Goldman Sachs’ new forecast in which they project oil to exceed $90 per barrel in the later parts of the year. Goldman believes that the reason for this $90/barrel forecast is due to the “lingering impact of Hurricane Ida on supply while demand ramps up, particularly in COVID-averse Asia.” With this hurricane effect in mind, analysts also suggest that Ida could prove to be the most bullish storm in United States hurricane history.
On a positive note, oil demand continues to ramp up, hitting comparable pre-pandemic levels. This primarily reflects the decrease in COVID cases around the country over the past month to a point where people are beginning to travel more than they used to. Unfortunately, while the United States is seeing declining numbers, areas in Asia such as Singapore are dealing with a deadly amount of cases that have begun to shut down their country. While COVID cases continue to fluctuate and supply and demand are continually disrupted by the evolving market post-hurricane season, higher oil prices are the expectation for the rest of this year.