Oil prices could slump to $75 a barrel in a recession — or jump to $150 if European sanctions slam Russian supplies, BofA says
- Analysts at Bank of America laid out three scenarios for the outlook on Brent crude
- The international oil benchmark should average $102 per barrel in 2022 and 2023, BofA said.
Oil prices could surge higher or plunge lower depending on what happens next in global
Mounting fears of a
"Surging inflationary pressures from food to
The various crosscurrents and risks left BofA with a wide range of possibilities. For now, analysts don't see a recession and still expect Brent crude to average $102 per barrel in 2022 and 2023, after averaging about $104 for the year to date.
On Friday, Brent oil rose 2.6% to nearly $113 per barrel, but is down from a high of $133 reached in March.
A recession, however, would trigger a pullback in
If growth does go south, any easing in monetary policy from central banks would support oil prices somewhat. So even in the event of a recession in 2023, BofA sees crude averaging more than $75 a barrel.
Then there is Russia's war on Ukraine, and the
As the EU's
If European sanctions push Russian oil production below 9 million barrels per day, then oil prices could spike to $150, BofA warned. Indeed, the long-term consequences of such supply disruptions have not been fully appreciated, it added.
"Yet the market does not seem to be pricing in a decade-long Russian supply crisis, as long dated oil prices have stayed firmly anchored in our long term oil price band of $60 to $80/bbl," analysts said. "Thus, extended sanctions on Russian energy could act as a price floor even if near-dated spot oil price downside risks grow."
- Coffee Maker - Best coffee machine for home in India
- Although FII flows have reversed, retail investor confidence remains low thanks to macro concerns
- Brain-dead woman's organs save four lives
- Goa hotels recorded the best occupancies and earned more too says report
- Best tech gifts for your sisters this Rakhi