JPMorgan predicts $380 oil on worst-case Russian output cuts Global oil prices could reach a “stratospheric” $380 a barrel if US and European penalties prompt Russia to inflict retaliatory crude output cuts, JPMorgan Chase analysts warned. The Group of Seven leading industrial nations are working out a complicated mechanism to cap the price fetched by Russian oil in an attempt to tighten the screws on President Vladimir Putin amid Russia's invasion of Ukraine. But Moscow can afford to reduce daily crude production by 5 million barrels without excessively damaging the Russian economy, JPMorgan analysts including Natasha Kaneva wrote in a note to clients. For much of the rest of the world, however, the results could be disastrous. A 3 million barrel cut to daily supplies would push benchmark London crude prices that are now around $111 to $190, while the worst-case scenario of 5 million could mean “stratospheric” $380 crude, the analysts wrote. “The most obvious and likely risk with a price cap is that Russia might choose not to participate and instead retaliate by reducing exports,” the analysts wrote. “It is likely that the government could retaliate by cutting output as a way to inflict pain on the West. The tightness of the global oil market is on Russia’s side.”
JPMorgan analysts are smoking crack laced with crude to even think that. It is impossible for WTI to reach that price.
Inflation adjusted the price in 2008 was $200 in todays dollars. When a short squeeze is underway anything can happen in the markets. Prices can spike to insane levels. So prices could spike to over $300 but I doubt will stay up there for long.
I seriously doubt it will go that high, but it does, it's not just Russia to blame. It's our own war against domestic energy. Oil prices were going up steadily about 16 months before Russia-Ukraine (do the math on that one). Biden Moving to Close Largest Oil Field Accounting for 40% of All Domestic Production | DJHJ Media
Agreed although it's not just Biden, there has been a collective reluctance to invest in new oil production as a part of the ESG wave.
16 months before the invasion? Well, shit, 22 months before the invasion, WTI settled negative in price for the first time in history. So of COURSE it was going to climb back up over time! Oy!
Of course it was going to climb back up a bit...to maybe 2019 levels. Beyond that was due to other factors...and it went WAY beyond that.
It got back to 2019 levels with some up and down vol until Thanksgiving 2021. Then it went nuts north. But it is NOT going to hit near $400 per barrel. Nope, nuh nuh, will not happen.
Not sure what you're looking at, but crude stayed around the $50-65 range in 2019, and that was with one of the most robust, booming economies ever.