Source: FX168
FX168 Financial News (North America) on Friday, Bank of America Corporation released a report showing that if there is another cold winter, the global benchmark Brent crude oil may soar to more than 100 US dollars per barrel for the first time since 2014.
In addition, tight supplies in the global gas market could put more upward pressure on crude oil, as high gas prices encourage people to turn to oil.
As of 11:45 EDT on Friday, Brent crude rose 0.27% to $75.23 a barrel, while WTI crude rose 0.42% to $78.64 a barrel.
Analysts led by Blanch said higher oil prices could trigger inflation, which in turn could trigger "the next macro hurricane".
There are three main reasons that could lead to a jump in crude oil prices:
Due to the high price of natural gas, the replacement capacity of natural gas-oil can reach 2 million barrels per day.
Due to the cold winter, the demand for crude oil has increased by 500000 barrels a day.
With the reopening of the economy and the rise of the air travel boom, aviation consumption will soar to 500000 barrels per day in the first quarter of 2022.
"if all these factors are combined, oil prices could soar and lead to a second round of inflationary pressures around the world," the analysts said. " "in other words, we may only be one storm away from the next macro hurricane."
Analysts say a shortage of supply, coupled with large amounts of stimulus money from consumers, has led to a tightening of global commodity markets. So far, rising energy and commodity prices have pushed inflation by more than 5% in the past few months.
BofA said that in addition to the winter storm and current policies, a common theme was a lack of investor interest in traditional energy, leading to underinvestment in commodities.
"Please note that these signs of tightening in the spot market seem to be consistent with the limits of monetary and fiscal policy," the analysts said. " "investors are just wary of poor investment returns over the past decade and the coming green climate policy."
JPMorgan Chase & Co raised the price target for Brent crude to $84 from $78 as soaring natural gas prices prompted consumers to switch to fuel.
Analysts such as Natasha Kaneva and Gregory Shearer said in reports to clients that a shift in consumption from natural gas to oil around the world could increase demand by as much as 925000 barrels a day, potentially adding another $3 to the bank's target price. 925000 barrels a day could be close to the upper limit on how much oil can get from natural gas, 'fundamentally' limiting the price of Brent crude to about $90.
Brent crude prices topped $80 a barrel earlier this week, but prices have fallen as OPEC and its allies are expected to consider increasing production by 400000 barrels a day at next week's meeting.