BofA warns of oil prices rising above $110 in 2023 By Investing.com

Investing.com — Brent oil could rise to $110 a barrel in 2023, Bank of America analysts predict, amid remaining risks such as a ceiling on fuel prices from Russia and risks from OPEC members such as Iraq and Libya, writes Business Insider.< /p>

Brent is currently trading at around $86/bbl, which means BofA's upper bound is 28% upside. Prices for the brand have averaged around $101 a barrel this year and will be much the same next year, averaging $100 and peaking at $110 in the high season. In the first quarter of 2023, the price of Brent oil will be generally lower compared to the rest of the year, according to analysts.

Recall that last Friday the EU agreed on a cap on Russian oil prices at $60 per barrel, and the decision came into force this Monday, along with a ban on Russian oil imports to the EU by sea. Russia's response was a statement that it would not sell oil to any of the parties to this agreement, and Russian oil exports could be reduced to 1 million barrels per day.

BofA said in a note that if today's total oil production in Russia is somewhere around 10 million barrels per day, then any significant deviation below this value could lead to a sharp increase in prices.

But besides Russia, there are other risks, in particular, further interruptions in oil supplies from such OPEC producers as Libya, Nigeria, Iraq, which could “alert the market”, as there could be a shortage of 1 million barrels per day or more, and each unexpected 1 million barrel fluctuation in supply or demand will spur Brent prices up $20-$25 a barrel.

However, there are also a number of bullish factors: the transition from gas to oil and the recovery of the Chinese economy after the easing of restrictions. The expected recession poses a downside risk to prices as the average global recession reduced demand by 640,000 barrels per day.

— Materials from Business Insider

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