Oil prices, already at more than three-year highs, may be about to jump further. And, to JPMorgan Chase & Co., crude-related assets are starting to look attractive.
Brent oil could spike to $80 a barrel if the US and European Union reimpose sanctions on Iran and as Western powers expand the scope of the Syrian civil war, JPMorgan strategists, led by John Normand, wrote in a note on Friday. While this might ordinarily seen like a time to avoid cyclical assets, the recent ” tax gift” to US corporations and consumers makes it an opportunity to own petro assets, they said.
“Risks we thought might materialize this summer through Iran sanctions are emerging somewhat more quickly due to events in Syria,” said the strategists. New Syrian hostilities are likely to have a muted effect on oil, however, since the nation’s production has already fallen so deeply due to the seven-year-long war. Read More