Bank of America says oil prices may rise above $100

The global energy crunch could help propel oil prices above $100 a barrel for the first time since 2014 and spur a global economic crisis, according to Bank of America, Report informs referring to Bloomberg.

Natural gas prices have already surged to almost double that level in oil equivalent terms, and BofA says a spike in demand for diesel could push crude into similar territory. With monetary and fiscal policy stretched to the limit and energy costs rising as a share of economic output, higher oil prices could in turn create a macro crisis, the bank said.

The boost to crude would be driven by three factors: gas-to-oil switching as a result of high gas prices, a jump in crude consumption over a cold winter and higher aviation demand as the US reopens its borders.

“If all these factors come together, oil prices could spike and lead to a second round of inflationary pressures around the world,” analysts including Francisco Blanch wrote in the note. “Put differently, we may just be one storm away from the next macro hurricane.”