JPMorgan (JPM) Spooks Market with $120 Oil Forecast

Strategists at JPMorgan Chase (JPM) have spooked markets with a new forecast that says crude oil prices could reach $120 a barrel this year.

Analysts led by Natasha Kaneva, head of global commodities research at JPMorgan, say that Brent crude oil, the international benchmark, could surge as high as $120 per barrel after the U.S. and Israel took military action against Iran.

While many analysts have raised their forecasts for the price of crude oil in recent days, none have gone as high as JPMorgan’s $120 prediction. Other Wall Street firms see oil prices potentially rising as high as $100 a barrel, depending on how long the conflict between the U.S. and Iran lasts.

Impacts on Consumers

“We estimate that if the conflict lasts more than three weeks, [Gulf] oil producers would exhaust storage capacity and would be forced to shut in production. Under this scenario, Brent could trade in the $100-
$120 range,” writes JPMorgan in its new energy outlook.

West Texas Intermediate (WTI) crude oil, the American standard, is up 7% to $71.62 per barrel on March 2. Brent crude oil is also up 7% on the day and trading at $78.79 a barrel. Analysts say a further dramatic rise in prices could lead to an oil shock for consumers who will see prices rise dramatically at the gas pumps.

Comparing U.S. Oil Majors?

Here below is a chart comparing three leading U.S. oil majors: Chevron (CVX), Occidental Petroleum (OXY), and ExxonMobil (XOM).