BoA’s Predictions Suggest drastic Rise in Oil Prices

Americans already struggling with the soared prices of Oil and gas at the pump are likely to be hit with another tornado. Americans may have to witness trouble with the possibility of prices shooting up at a skyrocketing level in the coming months.

Bank of America’s Francisco Blanch, head of global commodities said that he believes that the Brent Crude benchmark may scale up to $120 per barrel by July 2022. This marks a 43% rise from the existing range of Oil prices currently around $84 per barrel. The existing prices itself have reached the highest levels since 2014.

Meanwhile, the gasoline prices have also been spiking enormously which on Thursday recorded highest levels in seven years hitting a national average of $3.415 per gallon. The Bank of America anticipates the escalating demand for with the persisting constraints on refining capacity to contribute to the surging Oil prices. Crude production in the U.S. has still not recovered to the pre-pandemic levels while the OPEC producers are holding back production to maintain the higher Oil prices.

In addition, domestic producers are caught up in the conundrum of financial investors thinking over investments in fossil fuels owing to the climate concerns.Such a chaotic situation has hampered productivity and capabilities of domestic producers to expand operations due to the ongoing credit crunch. A loop of production as well as supply constraints coupled with the stringency of European energy markets are accelerating global energy crisis.