Bank of America Analyst Raises Brent Crude Price Outlook to $90

Bank of America analyst Francisco Blanch said Brent crude could reach $90 a barrel this year due to a global supply deficit. He made the comments during a Bloomberg Television interview on Monday. Blanch stated that the market faces a deficit of 14 million to 15 million barrels per day. He said this shortfall equals 14% to 15% of the volume needed for prices to stabilize at $60 to $70 a barrel.

Blanch said the outlook assumes continued disruption at the Strait of Hormuz into next month. He noted that restoring tanker flows through the waterway would be the best outcome but warned that a double blockade could push prices to $120 or $130 a barrel by late June or early July. As of late Monday afternoon, Brent crude futures traded above $112. S. 55 per gallon according to AAA data.

Sachs raised its fourth-quarter Brent price outlook to $90 and its West Texas Intermediate outlook to $83 several weeks earlier. Frederic Lasserre, head of research at Gunvor, said the tipping point is clearly June. JPMorgan analysts warned of a potential crude shortage if the chokepoint remains blocked for another four weeks.