Knox has been closely watching the oil market and the reports from the International Energy Agency and points out that demand was likely to exceed supply later this year.

A major factor in the surge was the expectation of China’s demand.

Knox said the increase in the oil price was likely to occur at the same time as the IEA executive director Fatih Birol suggested there would be a tightness in the LNG price.

“This escalation of energy prices in the first half (of 2024) is likely to take the market by surprise,” Knox said.

“The combination of both increases at the same time may be greeted as the arrival of a new energy crisis.”

He said that would mean higher fuel and energy prices next year for Australians who were already battling to deal with skyrocketing costs in home electricity and gas prices.

“The IEA tells us there is increase in demand of 61 per cent for jet fuel and kerosene in China this year and that will lift total world demand to 103.4 million barrels a day in the third quarter and 103.5 in the fourth quarter.

“Currently the oil market is well supplied because there was a lot of increased supply last year and this has led to a softness in the price. We belive this softness will continue for another quarter, into the third quarter of 2023.

“Our model estimate falls from $US77 in the second quarter to $73 in the third quarter and that decline has already happened earlier this week. West Texas Intermediate crude was about $US70 a barrel.

“In the final quarter(of this year) this price weakness comes to an end. As stocks fall in the final quarter, price will rise and my model estimates it rises to $US95 a barrel in the fourth quarter and $112 in the first quarter of 2024.

“This rises a little further to $US113 a barrel in the second quarter of 2024.”

While Australia would be impacted by a hike in oil prices the nation also an exporter of oil and gas and the Australian dollar is often lifted by increases in energy.

Oil prices also impact the price of coal of which Australia is a major exporter.