Brent Could Rise Above $90/bbl On Fed Pivot, China Reopening: BofA

Brent crude oil prices could rebound and quickly rise above $90/bbl as a result of a pivot in the US Federal Reserve's monetary policy and the economic reopening by China, Bank of America (BofA) Global Research said.

• Oil prices have been steadily declining recently because of fears that a weakening global economy would heavily weigh on fuel demand, setting prices on track for a second consecutive quarterly fall.
• BofA forecasts Brent prices to average $100/bbl in 2023, driven by a Chinese oil demand recovery on a post-COVID reopening and a drop in Russian supplies of about 1mbpd against the backdrop of EU sanctions.
• Prices could also receive support from a full 2mbpd output cut by OPEC+.
• China last week announced significant changes to its zero-Covid strategy, loosening rules that curbed the spread of the virus.
• However, "our oil demand and price projections for 2023 rely heavily on robust China and India demand growth, so any Asia reopening delays could affect our expected price trajectory”, BofA said.
• Brent FEB 23 up 2.2% at 77.74$/bbl
• WTI JAN 23 up 2.9% at 73.1$/bbl