GEISHA KOW­LESSAR-ALON­ZO

geisha.kow­lessar@guardian.co.tt

For oil pro­duc­ers in the re­gion like T&T, oil prices have re­cov­ered some­what and sta­bilised at around the US$40 per bar­rel (WTI), af­ter reach­ing his­toric lows.

This com­pares to an av­er­age WTI price of US$57 per bar­rel in 2019, the In­ter-Amer­i­can De­vel­op­ment Bank (IDB) not­ed in its new re­port on the on­go­ing im­pact of the cri­sis for coun­tries in the re­gion

Fu­ture prices set for the next six to 12 months have al­so sta­bilised at around US$40 per bar­rel.

“That said, there could be sub­stan­tial volatil­i­ty be­cause the fu­ture evo­lu­tion of the economies of ma­jor oil con­sum­ing coun­tries is high­ly un­cer­tain, and oil de­mand is close­ly linked to eco­nom­ic con­di­tions in those coun­tries,” the re­port said.

In ad­di­tion, even with the re­gained sta­bil­i­ty of oil prices , the drop com­pared to last year will cer­tain­ly af­fect the val­ue of pro­duc­tion for T&T, Suri­name, and the new oil ex­porter, Guyana, it added.

Nat­ur­al gas prices have con­tin­ued de­clin­ing re­cent­ly, with the Hen­ry Hub price drop­ping be­low a new low of US$1.50 MMB­tu in late June.

Fu­ture prices in­di­cate an ex­pect­ed re­cov­ery to well over US$2 MMB­tu ear­ly next year.

How­ev­er, the con­tin­ued de­cline of nat­ur­al gas prices is of con­cern for T&T, giv­en that its nat­ur­al gas pro­duc­tion is ten­fold larg­er than its oil pro­duc­tion, the re­port said.

It said while coro­n­avirus curves had flat­tened and sev­er­al air­ports re-opened, the re­gion still faces a treach­er­ous tran­si­tion to a post-cri­sis sce­nario.

The re­port said as coun­tries be­gin to open their do­mes­tic economies, they are still bat­tered by ex­ter­nal shocks.

This is par­tic­u­lar­ly the case for the tourism-de­pen­dent economies that ex­pe­ri­enced a vir­tu­al shut­down of the sec­tor dur­ing the sec­ond quar­ter of the year, the re­port said.

It added that nat­ur­al-re­source-based economies are al­so suf­fer­ing from the lin­ger­ing ef­fects of the de­cline in com­mod­i­ty prices and re­lat­ed ex­ter­nal de­mand.

Tourism was ad­verse­ly af­fect­ed dur­ing the first quar­ter of 2020 as the cri­sis be­gan to un­fold, and the sec­tor was ef­fec­tive­ly shut down dur­ing the sec­ond quar­ter as com­plete trav­el pro­hi­bi­tions came in­to place.

The re­port said ex­pec­ta­tions for the third quar­ter re­main un­cer­tain, but prospects for a rapid re­turn to pre-cri­sis lev­els of de­mand re­main grim.

The re­port re­views the on­go­ing im­pact of the cri­sis for coun­tries in the re­gion, and pro­vides rec­om­men­da­tions for pol­i­cy­mak­ers as they po­si­tion them­selves for a post-COVID-19 re­cov­ery.

The re­port, Caribbean Quar­ter­ly Bul­letin: The Pan­dem­ic Saga Con­tin­ues, al­so in­cludes de­tailed as­sess­ments for the Ba­hamas, Bar­ba­dos, Guyana, Ja­maica, Suri­name, Trinidad and To­ba­go, and the coun­tries of the Or­gan­i­sa­tion of East­ern Caribbean States (OECS).