Oil prices may recover due to China and Fed
2022.12.12 09:37
Oil prices may recover due to China and Fed
Budrigannews.com – A dovish pivot in the U.S. Federal Reserve’s monetary policy and a “successful” economic reopening by China could prompt a rebound in the global oil benchmark and a rapid rise above $90 per barrel, according to Bank of America (NYSE:) Global Research stated BofA.
Oil prices have been steadily falling lately as a result of concerns that a weakening global economy would reduce demand for fuel, setting prices up for a second consecutive quarterly decline. O/R] The BofA predicts that Brent prices, which were at $75.95 a barrel on Monday morning, will average $100 a barrel in 2023. This is due to a recovery in Chinese oil demand following the COVID reopening and a decrease in Russian supplies of approximately 1 million barrels per day (bpd) in the face of sanctions imposed by the European Union.
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In addition, the bank stated in a research note dated December 9 that a full implementation of a 2 million bpd OPEC+ output cut could be implemented to support prices.
Last week, China made the most significant adjustments to its steadfast anti-COVID policy since the pandemic began three years ago. The country relaxed regulations that had slowed the virus’s spread but also sparked protests and hampered the world’s second-largest economy.
However, the bank stated that “our oil demand and price projections for 2023 rely heavily on robust China and India demand growth,” and that “given the low levels of immunity in China,” the path to a post-pandemic environment may be bumpy.
