Oil going to $120?

Wednesday, 20 September 2023

JPM with the note.

Oil prices are back up 27% since 2Q23, posing downside to growth

• Some of the move owes to stronger demand (1/4), but a larger supply shock (3/4) will be a drag
• Our model suggests global GDP could be damped by 0.5%-pt (ar) over two quarters if prices sustained
• Jump in Brent to $120/bbl would cumulate to a 60% jump from 2Q23, pushing expansion to near stall

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.