Allianz: oil could reach 140 dollars/barrel and send the world into recession
Crude oil prices could reach $140 a barrel and send the world into recession, Paris-based Allianz Trade said on Friday.
Tensions in the Middle East and the escalation between Israel and Hamas into a broader regional conflict could trigger a surge in crude oil prices that could see the commodity trade at $140 a barrel, he told Bloomberg Television Ana Boata, head of economic research at Allianz Trade.
“Higher oil prices will have a direct impact,” Boata said, adding that prices could rise from the current $90 to $140 at their peak, even averaging $120 in 2024. The average would be, in reality, much more impactful on economic growth than a single peak at $140, towards which markets can seek protection.
“Clearly at these levels of energy prices, we understand that central banks would be much more in a wait-and-see mode before cutting interest rates,” Boata said, adding that this could send the world into a recession, slowing the global slowdown . growth at just 2% – the contraction threshold – or half a point less than the baseline scenario.
According to Boata, therefore, the basis of the recession is not only the high price of oil, with direct destruction of demand and incomes, but also the usual reckless behavior of the Central Banks in the face of flare-ups, albeit inflationary, but generated by external and non-external factors. monetary.
“Clearly we don't have this as a baseline scenario for now,” Boata said, “but clearly we can give a 20% chance to this downside scenario.” And according to Boata this would lead to high oil prices. “This is the direct impact of this conflict.” This could push global inflation rates up to 5.
Even before the conflict, oil industry analysts were raising their crude oil price forecasts for 2023, but only a handful of those polled by Reuters in September saw crude oil rising to $100. At the time, Brent was trading at 96 dollars. Reuters' September oil survey showed on Friday that 42 economists and analysts now see Brent crude prices averaging $84.09 a barrel in 2023, up from the consensus projection of $82.45 in August.
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The article Allianz: oil could reach 140 dollars/barrel and send the world into recession comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/allianz-il-petrolio-potrebbe-arrivare-a-140-dollari-barile-e-mandare-il-mondo-in-recessione/ on Sun, 22 Oct 2023 09:00:39 +0000.