Oil could top US$125 this summer if Hormuz stays shut, Ninety One says

Oil prices could rise above US$125(HK$952.76) a barrel this summer if the Strait of Hormuz does not reopen soon, Ninety One said, warning that the market is already short about 12 million barrels a day as peak demand season begins.

Paul Gooden, head of global natural resources at Ninety One, said the disruption was larger than the supply losses seen in the two 1970s oil crises and the Russia-Ukraine energy shock combined.

He said the market was being balanced for now by inventory drawdowns and demand destruction. China’s earlier build-up of oil inventories has helped buy the market more time, but inventory support is not sustainable if supply flows do not normalize.

He oversaw the medium-term oil outlook had also shifted, lifting his mid-cycle price view to US$80 from US$70, as geopolitics, future strategic petroleum reserve and slower supply growth were tightening the market.

Gooden also said AI was strengthening the long-term case for natural resources by raising demand for electricity, natural gas and copper.

Ninety one has increased exposure to energy, fertilizers and aluminium this year while trimming overweight positions in copper and precious metals, he added.

Effie Zhang

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