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Soaring natural gas prices, a cold winter and the reopening of international air travel could push oil prices to $ 100 a barrel and trigger the next economic crisis, according to Bank of America.
The bank had already said last month that oil prices could reach $ 100 a barrel over the next six months if we have a colder winter than usual, which could be the biggest driver of global markets. energy over the next few months.
Today, Bank of America says the potential surge in oil to $ 100 could be the trigger for a global crisis due to high inflationary pressure.
In a note released Friday by Bloomberg, BofA said the switch from gas to oil with record natural gas prices could stimulate additional demand for oil, especially diesel. Then a colder-than-usual winter would also push energy demand and prices up, while a reopening of U.S. borders for international travel would increase demand for jet fuel.
“If all of these factors come together, oil prices could skyrocket and trigger a second round of inflationary pressures around the world,” BofA analysts wrote in the note.
“In other words, we may only be one storm away from the next macro-hurricane,” said the bank, carried by Bloomberg.
While oil prices briefly exceeded $ 80 a barrel earlier this week, fears of persistent inflation around the world have increased as commodity prices soar. High prices of energy commodities, including crude oil, are expected to further increase inflation, which is already above the targets of the Fed and central banks. Currently, inflationary pressures are seen as essentially transient. However, high and sustained oil prices would put more pressure on prices.
BofA is bullish on oil not only in the short term, but also in the longer term, due to the chronic underinvestment in new supplies, driven by last year’s crisis and the net zero liabilities of energy companies and consumers. governments.
“A multi-year increase in crude oil prices is now in the cards,” notes Bank of America.
By Tsvetana Paraskova for OilUSD
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