Brent could quickly top $90/bbl on Fed pivot, China demand recovery: BofA

(Reuters) – Global oil benchmark Brent could rebound and quickly rise above $90 a barrel amid a smooth pivot in monetary policy by the U.S. Federal Reserve and a “successful” economic reopening by China, said Bank of America (BofA) Global Research. .

Oil prices have been steadily falling of late on fears that a weakening global economy would reduce demand for the fuel, putting prices on track for a second straight quarterly decline. (OR)

BofA expects Brent prices – trading at $75.95 a barrel on Monday morning – to average $100 a barrel in 2023, also driven by a recovery in Chinese oil demand following a post-Covid reopening and a decline of Russian supplies of approximately 1 million barrels per day (bpd) amid European Union sanctions.

Moreover, an OPEC+ production cut of 2 million barrels per day could be fully implemented to support prices, the bank said in a Dec. 9 research note.

China last week announced the most sweeping changes to its staunch anti-Covid regime since the start of the pandemic three years ago, relaxing rules that have halted the spread of the virus but sparked protests and hampered the world’s second-largest economy.

However, “our oil demand and price projections for 2023 rely heavily on robust demand growth in China and India, so any delay in reopening in Asia could affect the expected price trajectory,” the bank said , adding that the road to a post-pandemic environment may be bumpy. “Given China’s Low Level of Immunity”.

(Reporting by Kavya Guduru in Bengaluru; Editing by Maju Samuel)