(IBTimes) - BAC
A disorderly break-up of the EuroZone could drive Brent Crude
Oil prices to as low as 60 bbl in the resulting sharp European
recession and negative Global economic consequences, Bank of
America Merrill Lynch (
) said Friday.
"If policy makers were unable to stem the contagion following
Greece's exit from the euro, it could potentially lead to a chain
reaction where other countries have few options but to opt out of
the currency union as well," the bank said in a research
In the event of the disorderly broad EuroZone break-up, oil
demand in developed European economies could drop by 2-M BPD if
the region's economy shrinks by 10%, the bank said.
"This could create a large demand gap in Global Crude Oil
balances resulting in Oil prices falling sharply," it added.
But if Greece is the only country to leave the EuroZone, Brent
could fall to 80 bbl, while the benchmark could drop to 100 bbl
if the possibility of Greece leaving the Euro is explored but
does not materialize, Bank of America Merrill Lynch said.
"Finally, if Greece is able to renegotiate its bailout package
successfully and stays in the Euro, Brent Crude Oil prices could
rebound to 120 bbl," the bank adds.
Thursday, the bank said it sees Brent Crude Oil averaging 118
bbl this year and 120 bbl in Y 2013, although another round of
monetary easing in Europe could push prices as high as 140 bbl
over the next 12 months.
At 1006 GMT ICE July Brent was trading down 0.54, or 0.5%, at
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red
Roadmaster's Technical Report on the US Major Market Indices, a
weekly, highly-regarded financial market letter, read by opinion
makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and
stock markets since 1984, following a successful business career
that included investment banking, and market and business
analysis. He is a specialist in equities/commodities, and an
accomplished chart reader who advises technicians with regard to
Major Indices Resistance/Support Levels.
For more information, go to