Global oil benchmark Brent crude could rise by US$5 to US$20 a barrel depending on the severity of the Russia-Ukraine crisis, Bank of America (BofA) Global Research said on Tuesday (Feb 22), adding that prices could drop by US$2 to US$4 if tensions de-escalate.

Oil hit its highest since 2014 on Tuesday, with Brent futures reaching US$99.50 a barrel after Moscow ordered troops into two breakaway regions in eastern Ukraine.[O/R]

The bank sees Brent heading to US$120 a barrel by mid-2022, with fundamentals justifying a near-term spike and demand projected to rise by 3.6 million barrels per day (bpd) to surpass pre-pandemic levels at nearly 101 million bpd this year.

“A weaker dollar trend and a pro-growth macro backdrop, if it indeed occurs, could support crude near triple digits in the second half of the year,” the bank said in a research note.

A potential nuclear deal with Iran and associated sanctions relief would quickly translate into lower oil prices, the bank’s analysts noted.

Analysts at BofA believe Brent prices will need to average US$60 to US$80 per barrel to keep the global oil market in balance out to 2027.
Source: Reuters