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JPMorgan Sees ‘Stratospheric’ $380 Oil on Worst-Case Russian Cut

Stock Markets Jul 01, 2022 04:18PM ET
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© Reuters JPMorgan Sees ‘Stratospheric’ $380 Oil on Worst-Case Russian Cut

(Bloomberg) -- 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 & Co. (NYSE:JPM) analysts warned.

The Group of Seven nations are hammering out a complicated mechanism to cap the price fetched by Russian oil in a bid to tighten the screws on Vladimir Putin’s war machine in Ukraine. But given Moscow’s robust fiscal position, the nation can afford to slash daily crude production by 5 million barrels without excessively damaging the 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 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 chose 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.”

©2022 Bloomberg L.P.

JPMorgan Sees ‘Stratospheric’ $380 Oil on Worst-Case Russian Cut
 

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Comments (11)
Paulo JM
Paulo JM Jul 03, 2022 5:07PM ET
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Russia is selling to Asia instead of selling to Europe. Panic news!
Ronald Warren
Ronald Warren Jul 01, 2022 8:15PM ET
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The United States uses 20 million barrels of oil a day. Only 600,000 barrels a day is imported. That's only 3%. Our oil comes from domestic production! If they raise the price to $380 a barrel because of problems with Russia, we're looking at civil war and the state of Texas will be the first battleground.
Don Getty
Don Getty Jul 01, 2022 8:15PM ET
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why would there be civil war - foolish comment - oil gets to 200/barrel every dog in will be digging for oil not bones
taylor jason
taylor jason Jul 01, 2022 8:15PM ET
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the us would lift sanctions on Iran and Venezuela before that ever happened
Brad Albright
Brad Albright Jul 01, 2022 8:15PM ET
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Looney tunes.
Edward Chong
Edward Chong Jul 01, 2022 8:15PM ET
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oh u are so right haha.
Samantha
Samantha Jul 01, 2022 7:47PM ET
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Jaime Dimon has direct access to the White House, the Federal Reserve, and Congressional legislators. He is a welcome guest on Fox news, a platform he used extensively to press for the dismantling of Dodd-Frank. Bad enough his analysts are used to spark fear of Recession (Dimon is an open critic of rate hikes). He is peddling influence that works against the support of Ukraine, Europe, NATO, and the U.S. The U.S. is a net exporter of petroleum and is setting new records for U.S. Gulf crude oil exports. JPMorgan Chase is the global leader in financing fossil fuel energy sources. Reported net worth of JPMC as of 6/30/2022 is 330B+. The estimated loss in writing off Russian assets in a letter to Chase investors is a mere billion in comparison.
syafizi sazali
syafizi sazali Jul 01, 2022 7:14PM ET
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G7 rather see their own people and the rest of the world suffer than directly end the war with their own military might. Such cowardice, much wow.
Brad Albright
Brad Albright Jul 01, 2022 7:14PM ET
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While that may yet come, it would involve even greater suffering. This is a cost/benefit analysis.
syafizi sazali
syafizi sazali Jul 01, 2022 7:13PM ET
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G7 rather see their own people and the rest of the world suffer than directly end the war with their own military might. Such cowardice, much wow.
Jul 01, 2022 6:44PM ET
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Howard is the liberal biden simp thanking the dems and federal reserve for ruining america
Howard Blum
Howard Blum Jul 01, 2022 5:59PM ET
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The cost to the rest of the world will be far greater if Russia's Imperialist ambitions go unchecked.
Brad Albright
Brad Albright Jul 01, 2022 5:59PM ET
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Exactly. This is about preserving civilized relations among nations. The chaos pimps are against it.
Howard Blum
Howard Blum Jul 01, 2022 5:59PM ET
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The cost to the rest of the world will be far greater if Russia's Imperialist ambitions go unchecked.
Howard Blum
Howard Blum Jul 01, 2022 5:59PM ET
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The cost to the rest of the world will be far greater if Russia's Imperialist ambitions go unchecked.
Gabe Domen
Gabe Domen Jul 01, 2022 5:58PM ET
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That will be a declaration of war, plain and simple...and, you can follow. 🤐
 
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