Energy

BofA

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Drop in Russian Oil Supply Likely to Trigger Global Recession: BofA

Any further drop in Russian oil supply is likely to lead to a global recession and could even trigger a full-blown energy crisis that pushes prices past $150 a barrel, strategists at Bank of America have warned in a note.

Russian oil production has fallen by roughly 1 million barrels per day (bpd) in 2022, according to a BofA team led by Francisco Blanch. The fall has come as countries and traders cut their purchases of the country's energy following its invasion of Ukraine.

Oil Inventories Down to Dangerously Low Point

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Oil Inventories Down to Dangerously Low Point

Crude oil inventories are down to a dangerously low point across Europe, North America, and OECD Asia just as OPEC spare production capacity has dwindled to the lowest levels since April 2020.

That’s according to a new BofA Global Research report, which was sent to Rigzone on Monday. The report also highlighted that petroleum product inventories have fallen to “precarious levels” for middle distillates and gasoline “as the market heads into the peak of the U.S. driving season”.

“As a result, refined petroleum cracks have recently spiked to record levels, contributing to boost volatility across the oil complex,” the BofA Global Research report stated.

“Most worryingly, strategic oil barrels held by OECD governments are already low and set to decline steeply going forward, leaving consumers exposed to any future negative supply shock,” the report added.