Oil prices are expected to hit $100 a barrel as early as this winter due to soaring prices for natural gas, along with an approaching cold-weather season that could even trigger the next economic crisis, Bank of America says.
The possibility of soaring oil prices and high inflationary pressure could become the trigger for a global crisis, the analysts warned in a note carried by Bloomberg.
According to the multinational, gas-to-oil switching with record-high natural gas prices could cause additional oil demand.
Moreover, energy demand is expected to grow due to a colder than usual winter, pushing prices even higher. At the same time, the reopening of international airline travel is also projected to boost demand for jet fuel.
“If all these factors come together, oil prices could spike and lead to a second round of inflationary pressures around the world,” the analysts said, as quoted by the agency.
“Put differently, we may just be one storm away from the next macro hurricane.”
The banking major also said that underinvestment in commodities due to poor returns is also set to fuel higher oil prices in the longer-term.
“A multiyear run up in crude oil prices is now in the cards,” Bank of America said.
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