Oil could hit $220 a barrel if "Libya and Algeria were to halt oil production together," analysts at Nomura investment bank predicted.
Such a shock would reduce OPEC spare capacity to just 2.1 million barrels a day, levels similar to those seen during the first Gulf War and in 2008, when prices hit $147 per barrel, they wrote.
If the supply disruption and the resulting price action where to mirror 1990-91 then we could see $220 a barrel within a couple of months, according to Michael Lo from Nomura, who also warned that speculation could make that price even higher.
"We could be underestimating this, as speculative activities were largely not present in 1990-91," Lo added.
The price action could be big for oil in the coming weeks, Jim Bianco, president of Bianco Research, said.
"Oil either goes up because of higher demand or a supply shock. Supply shocks are bad for the economy
Join us on our
Share this page with your friends
on your favorite social network: