Economics
Global Growth at Risk From $100 Oil Next Year, BofAML Says
- Dollar strength could sharpen pain for crude importers
- New supply means U.S., Australia and Brazil less vulnerable
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If oil prices head above $100 a barrel, it could shave 0.2 percentage points from global economic growth next year -- but this hinges crucially on the dollar, according to Bank of America Merrill Lynch.
Sanctions on Iran, shale bottlenecks, Venezuelan turmoil and increased demand pose an upside risk to prices, the bank said in a note. Higher prices would slow growth in the euro-area, U.K. and Japan though ramped-up energy production in the U.S., Australia and Brazil would likely cushion the blow to the world’s economy, it said.