Cailianshe September 20th According to data from the American Automobile Association (AAA), the average price of ordinary-grade gasoline in the United States was $3.67 per gallon on Monday (19th).
U.S. gasoline prices fell for 14 consecutive weeks after hitting a record high of $5.01 per gallon on June 14, and have fallen to the level before the outbreak of the Russian-Ukrainian conflict. Despite this, oil prices are still up about 15% from a year ago.
Just as American drivers were slowing down on the decline in oil prices, Bank of America warned that the recent downward trend of oil prices in may be coming to an end!
Bank believes that crude oil prices will exceed $100 per barrel by the end of this year and will remain at this level in 2023, making consumers' lives more difficult.
Bank of US Commodity and derivatives strategist Francisco Blanch and his team pointed out in a research note that "oil prices are not expected to fall sharply... Widespanning inflation in the United States and elsewhere may boost oil prices."
On Monday, the international benchmark Brent crude oil closed at $91 a barrel, down to $88 earlier this month; WTI crude oil futures closed at $85.36 a barrel, down to $81.20 a barrel this month.
Factor 1: Asian oil demand is expected to rise
Bank of the United States believes that Asia's demand for oil will be curbed in 2022, but it is expected that demand will rebound next year, and oil prices should fluctuate accordingly.
International Energy Agency (IEA) expects Asian oil demand to drop for the first time in more than 30 years this year.
BOC research team wrote that one factor that pushes oil prices higher in the coming months is the rise in Asian oil demand. It is estimated that by 2023, Asian oil demand will account for 86% of the global growth .
Factor 2: OPEC may reduce production more significantly
In addition, OPEC and its partners have decided to cut 100,000 barrels of oil production per day from October.
Bank of America analysts pointed out that although the production cut is relatively small, this is the first time in history that OPEC has cut production at a price higher than $90 per barrel, which may mean that OPEC will have greater intentions to cut production in the future, even if oil prices are still at a high level compared with the same period last year.
Factor 3: Oil may become an alternative fuel
Bank said that the recent surge in natural gas and coal prices is another reason for the bullish oil prices in the next year. When the prices of these key commodities rise, some utilities tend to turn the main fuels of electricity toward oil to maintain profitability, which leads to a surge in demand for oil.
Analysts also believe that the Biden administration’s recent statements left them with the impression that when oil prices reach $80 a barrel, the federal government may begin to supplement the strategic oil reserves (SPR).
The impact of the European "Russia ban"
Bank U.S. team pointed out that if the global economic recession comes, oil demand is expected to decline, which will affect the decline in oil prices.
However, they still believe that low oil inventory and capacity will offset the price decline and keep oil prices high by the end of next year.
After the embargo on Russian offshore oil imports took effect in December, Russia's daily oil supply may plummet by more than 1 million barrels. By February next year, another 1 million barrels per day of oil supply will likely be interrupted due to the EU's fuel embargo.
Bank estimates that for every 1 million barrels of oil lost in the global daily supply, oil prices will rise by $20 to $25 a barrel.
Source: Cailianshe
Original title: Enjoy low-priced oil as soon as possible! Bank of America warns: Oil prices will be above $100 next year
